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# Canadian inflation rate in 1938: -2.56%

### Inflation in 1938 and Its Effect on Dollar Value

Purchasing power increased by 2.56% in 1938 compared to 1937. On average, you would have to spend 2.56% less money in 1938 than in 1937 for the same item. This is an example of deflation.

In other words, CA\$1 in 1937 is equivalent in purchasing power to about CA\$0.97 in 1938.

The 1937 inflation rate was 4.00%. The inflation rate in 1938 was -2.56%. The 1938 inflation rate is lower compared to the average inflation rate of 3.60% per year between 1938 and 2019.

Inflation rate is calculated by change in the consumer price index (CPI). The CPI in 1938 was 7.60. It was 7.80 in the previous year, 1937. The difference in CPI between the years is used by Statistics Canada to officially determine inflation. Because the 1938 CPI is less than 1937 CPI, negative inflation (also known as deflation) has occurred.

 Average inflation rate -2.56% Converted amount (CA\$1 base) CA\$0.97 Price difference (CA\$1 base) CA\$-0.03 CPI in 1937 7.800 CPI in 1938 7.600 Inflation in 1937 4.00% Inflation in 1938 -2.56%

### How to Calculate Inflation Rate for CA\$1, 1937 to 1938

This inflation calculator uses the following inflation rate formula:

CPI in 1938CPI in 1937
×
=

Then plug in historical CPI values. The Canadian CPI was 7.8 in the year 1937 and 7.6 in 1938:

7.67.8
×
CA\$1
=
CA\$0.97

CA\$1 in 1937 has the same "purchasing power" or "buying power" as CA\$0.97 in 1938.

To get the total inflation rate for the 1 years between 1937 and 1938, we use the following formula:

CPI in 1938 - CPI in 1937CPI in 1937
×
100
=
Cumulative inflation rate (1 years)

Plugging in the values to this equation, we get:

7.6 - 7.87.8
×
100
=
-3%

Politics and news often influence economic performance. Here's what was happening at the time:

• The Second Sino-Japanese War starts when Japanese and Chinese troops clash at the Marco Polo Bridge.
• 193,000 Russians are executed by order of the Politburo's Operative Order 00447.
• Adolf Hitler and his military leaders hold a secret meeting where he reveals his plan to go to war.

### 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 1938 | Canada Inflation Calculator.” U.S. Official Inflation Data, Alioth Finance, 14 Oct. 2019, https://www.officialdata.org/CAD-inflation-rate-in-1938.