Consumer price index, actual versus implied path consistent with the 2% inflation target, seasonally adjusted Index 146  5.0  144  4.0  142  3.0  140  2.0  138  1.0  136  0.0  134 132  -1.0  Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct 2019 2020 2021 CPI inflation Sources: Statistics Canada and Bank of Canada calculations  Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct 2019 2020 2021 CPI Implied CPI path consistent with the 2% inflation target Last observation: December 2021  This surge in inflation has been more persistent than anticipated.
Part of it reflects a catch-up in prices after inflation dropped in 2020 (Chart 3, panel b). It also reflects the impacts of both supply constraints and strong demand in global markets—especially for goods. We now expect that inflation will remain close to 5% through the first half of this year.