Economists cut forecasts for GDP growth in Canada amid trade tensions

According to a Bloomberg survey conducted among 34 economists, in the second quarter of this year, the Canadian economy is projected to grow at an annualized rate of 0.7%. This is significantly lower than the 1.7% growth rate anticipated for the aforementioned period in the previous survey last month.

The change in forecasts was related to the majority of economic growth components. Thus, according to the estimates of the surveyed experts, a decrease is expected in the volume of exports, investments, and household consumption in Canada in the second quarter. Analysts also lowered the forecast for the third quarter, which now implies an increase in production by 0.8% instead of the previously announced 1.5%.

In addition, the survey participants noted the growing risks of stagflation. Inflation in Canada is getting stronger due to the upward pressure of US tariffs and the weakening of the national currency, thus making imported goods more expensive. As a consequence, the annualized change in the consumer price index is expected to average 2.4% this year, up from the previously expected 2.1%.

Moreover, the respondents raised their expectations for the unemployment rate in the country by 0.25 percentage points to 7% in the last half of 2025.