Canada's Strong GDP Growth Won't Prompt Rate Cut, Experts Say

The Bank of Canada is expected to keep interest rates steady on Wednesday, despite strong GDP growth in the second quarter. The economy expanded at an annualized rate of 3.3% in Q2, with gains recorded across nearly 90% of the economy.

According to David-Alexandre Brassard, chief economist at CPA Canada, the breadth of the rebound was a relief after a technical recession in Q1. He noted that manufacturing activities in June reached their highest level since tariffs were introduced in March 2025.

The strong GDP print has reinforced existing expectations that the central bank will hold steady, even as trade tensions mount and uncertainty over US tariff policy remains elevated. The competing pressures of inflation above target and a trade war that threatens to slow growth have put the BoC in a difficult position.