Market Participants Expect Moderate Canadian Growth Amid Uncertainty

According to the Bank of Canada's Market Participants Survey for Q2 2026, market participants expect real GDP growth in Canada to be around 1.3% by the end of 2026 and 1.9% by the end of 2027. The median forecast is higher than the 25th percentile, indicating a moderate level of optimism among respondents.

When asked about upside risks, the top three selected by respondents were easing of trade tensions (92%), larger-than-expected fiscal stimulus (58%), and decreasing geopolitical risks (31%). Downside risks included an increase in trade tensions (96%), tightening of global financial conditions (65%), and increasing geopolitical risks (42%).

The survey also found that the vast majority of respondents, 96%, believe the current level of Canadian GDP is below its potential output, indicating a negative output gap.