Inflation Calculation

Posted: December 2nd, 2013

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Inflation Calculation

Five year late of inflation

= 119.9 – 111.5 = 8.4

8.4/111.5 = 0.075

0.075*100 = 7.5%

7.5%

The inflation rate of Canada for the last five years is 7.5% calculated from the consumer price index.

Year experiencing the biggest inflation change

2007

= 111.5- 109.1 = 2.4

2.4/109.1= 0.21

0.21 *100 = 2.1%

2008

= 114.4-111.5 = 2.6

2.6/111.5 = 0.023

0.023*100 = 2.3%

2009 = 114.4 – 114.1 = 0.3

0.3/114.1 = 0.0026

0.0026 * 100 = 0.26%

2010 = 116.5 – 114.4 = 2.1

2.1/114.4 = 0.018

0.018 * 100 = 1.8%

2011 = 119.9 – 116.5 = 3.4

3.4/116.5 = 0.029

0.029 * 100 = 2.9%

The year that recorded the highest inflation rate was 2011, which was at 2.9%. The consumer index of 2011 shifted from 116.5 in 2010 to 119.9. With this difference, the inflation rate was higher than the rest of the years.

2009 experienced the least inflation rate at 0.26%. The consumer price index shifted slightly from 114.1 in 2008 to 114.4. This meant the least inflation rate.

Highest CPI component inflation rate

The inflation rate for the consumer index is calculated from the available data starting at 2008 to 2011 using the percentage table to calculate the average.

Food = 3.5 + 4.9 + 1.4 + 3.7 = 13.5

13.5/4 = 3.38%

Energy = 9.9 + -13.5 + 6.7 + 12.3 = 15.4

15.4 / 4 = 3.85%

Energy component experienced the biggest inflation rate during the period with an average of 3.85%. The energy sector experienced sharp turns with 2008 experiencing an inflation of 9.9 followed by a deflation of 13.5% in 2009. The next year saw an inflation rate of 6.7, which almost doubled the following year to 12.3%. This was followed by food closely with an average inflation rate of

Least CPI component inflation rate

Durable goods = -5.3 + -3.1 0.1 + -1.1 = -9.4

-9.4/ 4 = -2.35% inflation of 2.35% deflation rate

Durable goods experienced the least inflation rate or the biggest deflation rate of 2.35%.

Province experiencing highest inflation

The data used is for 2011 that provides a full year data. 2012 data is available for few months.

Nova Scotia experienced the highest inflation rate from observing the percentage table. It experienced an inflation rate of 3.8 in 2011.

Province experiencing least inflation rate

Iqaluit, Nunavut experienced the least inflation at 1.4%. this is from the percentage table used as stated above.