Bank of Canada Sees Economic Rebound with Modest Growth Forecast

The Bank of Canada's governing council expects economic growth to rebound to about 2.5% in the second quarter of 2026, after a period of weak growth and rising inflation.

The economy showed signs of recovery in the second quarter, driven by increased investment in the oil and gas sector and a resumption of export growth.

Labour Force Survey data for May and June indicated that job growth had resumed, but the labour market remained soft with an elevated unemployment rate of 6.5% last month.

The central bank expects inflation to ease gradually in the coming months, assuming oil prices continue to fall, before hovering around 2% in 2027 and 2028.