Statistics Canada will release January Consumer Price Index (CPI) data on Tuesday, February 20 at 13:30 and as we get closer to the release time, here are the forecasts by the economists and researchers of seven major banks regarding the upcoming Canadian inflation data.

Headline is expected at 3.2% year-on-year vs. the prior release of 3.4%. If so, it would be the first deceleration since October. Nevertheless, core trim is expected to fall a tick to 3.6% while core median is expected to remain steady at 3.6% YoY.

RBC Economics

The first Canadian inflation reading of 2024 should edge lower on falling energy prices and slower food price growth. We expect the consumer price index to rise 3.2% YoY, lower than 3.4% in December. But the underlying details will be closely watched for signs on whether inflation pressures are continuing to trend – albeit gradually – towards the BoC’s 2% target. Stripping out volatile components like food and energy, we expect price growth to hold at 3.4% YoY with the recent months’ mixed underlying drivers continuing. More than a quarter of price growth overall is still coming from higher mortgage interest costs that are a direct result of earlier BoC interest rate increases. If we exclude that component, price growth would already be back within the BoC’s 1% to 3% inflation target range. The share of the CPI basket seeing abnormally high inflation has also been declining. Roughly 51% of the consumer basket was growing at more than 3% over the last three months, down from a peak of 77% of the basket in July 2022. But we also look for YoY growth in the BoC’s preferred broader trim and median measures of underlying price growth to hold steady at 3.7% and 3.6%, respectively, in December