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# Canadian inflation rate in 1940: 5.13%

### Inflation in 1940 and Its Effect on Dollar Value

Purchasing power decreased by 5.13% in 1940 compared to 1939. On average, you would have to spend 5.13% more money in 1940 than in 1939 for the same item.

In other words, \$1 in 1939 is equivalent in purchasing power to about \$1.05 in 1940.

The 1939 inflation rate was 2.63%. The inflation rate in 1940 was 5.13%. The 1940 inflation rate is higher compared to the average inflation rate of 3.58% per year between 1940 and 2020.

Inflation rate is calculated by change in the consumer price index (CPI). The CPI in 1940 was 8.20. It was 7.80 in the previous year, 1939. The difference in CPI between the years is used by Statistics Canada to officially determine inflation.

 Average inflation rate 5.13% Converted amount (\$1 base) \$1.05 Price difference (\$1 base) \$0.05 CPI in 1939 7.800 CPI in 1940 8.200 Inflation in 1939 2.63% Inflation in 1940 5.13%

### How to Calculate Inflation Rate for \$1, 1939 to 1940

This inflation calculator uses the following inflation rate formula:

CPI in 1940CPI in 1939
×
=

Then plug in historical CPI values. The Canadian CPI was 7.8 in the year 1939 and 8.2 in 1940:

8.27.8
×
\$1
=
\$1.05

\$1 in 1939 has the same "purchasing power" or "buying power" as \$1.05 in 1940.

To get the total inflation rate for the 1 years between 1939 and 1940, we use the following formula:

CPI in 1940 - CPI in 1939CPI in 1939
×
100
=
Cumulative inflation rate (1 years)

Plugging in the values to this equation, we get:

8.2 - 7.87.8
×
100
=
5%

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

• Hitler makes a speech to the German Reichstag where he threatens Jews.
• Mahatma Gandhi begins his fast in protest against Britain’s autocratic rule in India
• The Battle of Nanchang takes place between the Kuomintang ant the Japanese, during Sino-Japanese War.
• The Spanish Civil War ends when Madrid falls to Francisco Franco.
• Britain and France declare war on Germany after it invades Poland, signaling the start of World War II.
• Mussolini’s Italy joins Hitler's war against Great Britain and France.
• Winston Churchill is named British Prime Minister, succeeding Neville Chamberlain.
• Nazi blitzkrieg conquest of France begins when the Germans cross the Muese River.
• Auschwitz concentration camp is opened in Nazi-controlled Poland.

### 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 1940 | Canada Inflation Calculator.” Official Inflation Data, Alioth Finance, 28 Jan. 2020, https://www.officialdata.org/CAD-inflation-rate-in-1940.