Canada's Economy Sees Q3 Rebound Driven by Net Exports

The Canadian economy is expected to rebound in Q3, according to Continuum Economics. A preliminary estimate indicates that June's GDP will increase by 0.2%, following gains of 0.3% in May and 0.6% in April.

This growth will be largely driven by a recovery in net exports, which were negative in Q1. However, this may raise concerns about the sustainability of the rebound. Monthly trade data shows that exports rose by 5.4% in real terms in Q2, while imports increased by 1.4%. This is expected to result in an 18.3% annualized increase in exports and a 6.3% rise in imports.

Domestic demand is also forecast to grow at a moderate pace of 1.2% annualized. Consumer spending is expected to rise by 1.6%, with overall consumption increasing at 1.4%. Government spending will pick up from Q1's decline, but will not match private consumption.

Investment is predicted to remain almost unchanged at -0.1% annualized. Business investment will return to growth after five consecutive quarterly declines, while government investment will see a second straight decline in a correction from three strong gains.