Canadian Economy Rebounds in Q2 with 0.3% Growth in May

The Canadian economy has shown signs of rebounding in the second quarter after experiencing a mild contraction in the first three months of the year. According to Statistics Canada, real GDP rose 0.3% in May, surpassing StatCan's initial estimate of 0.1%. The growth was seen across both goods and services sectors.

Andrew Grantham, senior economist at CIBC, noted that the rebound is stronger than initially expected and should put an end to recession talk. He attributed the growth to industries such as oil and gas extraction, which bounced back from temporary drags in the first quarter, and a resurgent housing market.

StatCan pointed out that offices of real estate agents and brokers saw activity increase 5.1% in May, while construction, manufacturing, and finance sectors also grew for a second consecutive month.

Economists expect growth to moderate in the second half of the year from the robust pace seen in Q2. High fuel costs and potential US tariffs are expected to impact growth. The Bank of Canada will make its next interest rate decision on September 2, with financial market odds indicating a nearly 97% chance of holding rates steady.