Tue, 02 Mar 2021

Canada's inflation eases in December

Xinhua
21 Jan 2021, 04:55 GMT+10

OTTAWA, Jan. 20 (Xinhua) -- Canada's Consumer Price Index (CPI) rose 0.7 percent in December 2020 from a year earlier, down from one percent growth in November, according to Statistics Canada on Wednesday.

Canada's inflation eased in December due to lower air transportation prices and reduced food price growth. Excluding gasoline, CPI increased one percent in December, down from 1.3 percent in the previous month.

On an average annual basis, CPI edged up 0.7 percent in 2020, following a 1.9 percent climb in 2019.

In 2020, the CPI rose at the slowest pace since 2009, during the economic downturn caused by the COVID-19 pandemic.

Slowing inflation was mostly attributable to a decline in consumer spending related to protective measures to restrict movement and encourage physical distancing during the pandemic, said Statistics Canada.

Excluding gasoline, the annual average CPI rose 1.3 percent in 2020.

The COVID-19 pandemic slowed price growth in consumer goods and services in 2020 from a year earlier, partially reflecting how Canadians adapted to staying home, traveling less, and buying more of certain items and fewer of others.

Despite food prices increasing, prices for non-durable goods declined because of falling gasoline prices, which were the largest contributor to the slowdown in CPI growth in 2020. Prices for semi-durable goods also decreased, mostly as a result of falling prices for clothing and footwear.

Inflation will be a key economic theme for 2021, particularly as headline CPI accelerates above two percent in the coming months as most economists expect. However, that strengthening will be driven by base effects from when COVID-19 first struck and walloped everything from gasoline prices to hotel costs.

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