Canada's Economy Surges 3.3% in Second Quarter

Canada's economy rebounded sharply in the second quarter, growing at an annualized rate of 3.3% after six months of virtually no growth. The GDP increase was driven by strong exports and solid domestic demand, which has slowly brushed off the impacts of over 18 months of US tariffs.

The economy grew at a quarterly rate of 0.8%, higher than the Bank of Canada's forecast of 2.5% growth projected in July. Healthy domestic demand, led by consumer spending and business investments, signals that the economy is on firm footing to withstand new US tariffs imposed this week.

Exports were a key contributor to the second-quarter growth, increasing at their fastest pace in over three years with an annualized rate of 3.6%. Final domestic demand rebounded to 1% in the second quarter, after being muted for several quarters as consumers and businesses stayed cautious due to trade uncertainty.