Could Canada’s headline inflation rate reach the neutral target of 2% by this summer, a full year sooner than the Bank of Canada’s own forecasts?
National Bank of Canada thinks so.
In a new report, economist Taylor Schleich argues that there’s actually a “clear path” to 2% inflation by the middle of this year.
“To get 2% inflation, one doesn’t need to assume inflation decelerates at all from the recent run-rate,” he writes. “Indeed, simply plugging in the average monthly increase from the past six months (+0.2%) brings you right to target in Q3.”
He notes that that’s even with the “problematic” shelter inflation, which continues to run more than 6% above year-ago levels and is the leading contributor to headline inflation right now.
This is also based on National Bank’s expectation that GDP growth will turn…
