Canada’s Economy Is ‘Staying Out Of Serious Trouble,’ Latest Data Shows

Canada’s economy is showing resilience, according to recent data, despite previous concerns from the central bank about a slowdown. The Bank of Canada is now forecasting a rise in economic growth for the third quarter, even as inflationary pressures ease. BMO chief economist Doug Porter noted that while the economy is working hard to stay afloat, it is managing to make slow progress. Early estimates indicate second-quarter growth at about 2.2% annually, surpassing the Bank of Canada’s 1.5% forecast.

The central bank has cut the benchmark interest rate for the second time consecutively, shifting focus to the risk of inflation dropping below the 2% target. Governor Tiff Macklem expressed confidence in inflation returning to this target, suggesting room for growth towards price stability.

CIBC chief economist Avery Shenfeld commented that stronger-than-expected second-quarter results may lead the Bank of Canada to revise its forecasts, though future rate cuts will likely depend more on inflation readings than GDP. Porter added that the GDP figures indicate the economy is stable, avoiding the need for drastic rate cuts or hikes, and is maintaining a balance with continued, measured interest rate cuts.