Canada's Economy Surges in Q2, But Tariffs Cast Shadow Over Q3 Growth

Canada's economy showed strong growth in Q2, driven by increased exports and household spending. The country's GDP rose 0.3% in June, but StatCan estimates flat growth in July due to the end of the FIFA World Cup. However, new tariffs imposed by the US on Canadian goods could dampen this momentum.

Ariane Curtis, senior North America economist at Capital Economics, warned that 'we can't get too excited about the outlook' given the latest preliminary estimate suggesting GDP was unchanged in July. Porter agreed that re-escalating trade tensions will sour growth prospects in Q3.

Despite this, some economists see positive signs in the data. Business capital investment increased for the first time in five quarters, driven by firms purchasing processing units used in data centers. This could persist despite the trade war's impact.