Canada's Economy Roars Back with 3.3% Q2 Growth

Canada's economy rebounded sharply in the second quarter after six months of stagnant growth. The country's GDP grew at an annualized rate of 3.3%, the fastest pace since 2023, according to data released by Statistics Canada on Friday.

The strong performance was driven by a surge in exports, which jumped 3.6% - the largest increase in over three years. This growth helped offset the impact of US tariffs and domestic demand, which also showed signs of recovery.

Domestic demand, a crucial metric to assess the health of the economy, rebounded to 1% in the second quarter, after contracting in the first quarter. Household final consumption expenditure, a key indicator of consumer spending, rose 0.8%, its highest level in three quarters, driven by higher salaries and government benefits.

The Bank of Canada had forecast growth of 2.5%, but the actual figure exceeded this target. However, the new round of US tariffs imposed on Canadian exports has injected uncertainty into the outlook, with economists warning that this could dampen economic growth.