# Canadian inflation rate in 2020: 2.25%

\$

## Inflation in 2020 and its effect on dollar value

\$1 in 2019 is equivalent in purchasing power to about \$1.02 today. The dollar had an average inflation rate of 2.25% in the last 12 months. As a result, the real value of a dollar has been decreasing recently. Purchasing power decreased by 2.25% in 2020 compared to 2019. On average, you would have to spend 2.25% more money in 2020 than in 2019 for the same item.

This means that today's prices are 1.02 times higher than average prices since 2019, according to Statistics Canada consumer price index. A dollar today only buys 98.04% of what it could buy back then.

The 2019 inflation rate was 1.99%. The current year-over-year inflation rate (2019 to 2020) is now 2.25%1. If this number holds, \$1 today will be equivalent in buying power to \$1.02 next year.

Inflation rate is calculated by change in the consumer price index (CPI). The CPI in 2020 is 136.40. It was 133.40 in the previous year, 2019. The difference in CPI between the years is used by Statistics Canada to officially determine inflation.

 Average inflation rate 2.25% Converted amount (\$1 base) \$1.02 Price difference (\$1 base) \$0.02 CPI in 2019 133.400 CPI in 2020 136.400 Inflation in 2019 1.99% Inflation in 2020 2.25% \$1 in 2019 \$1.02 in 2020

## How to Calculate Inflation Rate for \$1 since 2019

Our calculations use the following inflation rate formula to calculate the change in value between 2019 and today:

CPI today CPI in 2019
×
=
Today's value

Then plug in historical CPI values. The Canadian CPI was 133.4 in the year 2019 and 136.4 in 2020:

136.4133.4
×
\$1
=
\$1.02

\$1 in 2019 has the same "purchasing power" or "buying power" as \$1.02 in 2020.

To get the total inflation rate for the 1 years between 2019 and 2020, we use the following formula:

CPI in 2020 - CPI in 2019CPI in 2019
×
100
=
Cumulative inflation rate (1 years)

Plugging in the values to this equation, we get:

136.4 - 133.4133.4
×
100
=
2%

## Data Source & Citation

Raw data for these calculations comes from the government of Canada's annual Consumer Price Index (CPI), established in 1914 and computed by Statistics Canada (StatCan).

You may use the following MLA citation for this page: “Inflation Rate in 2020 | Canada Inflation Calculator.” Official Inflation Data, Alioth Finance, 20 Apr. 2021, https://www.officialdata.org/CAD-inflation-rate-in-2020.

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