Canada's economy to avoid recession — Bloomberg Survey

Uncertainty around US President Donald Trump’s trade policies is holding back Canadian companies from investing in their businesses and consumers from spending. However, firms’ officials surveyed by Bloomberg believe the country’s economy will avoid a recession.

In the second quarter, the Bank of Canada's business sentiment index dropped to its lowest level in a year, hitting -2.42, but fewer companies are now worried about tariff-related costs.

Recent reports support analysts' view that Canada's central bank will keep its interest rate at 2.75% at the July 30 meeting, as core inflation remains steady.

However, growing uncertainty about future US-Canada relations continues to hurt businesses. Company leaders are finding it harder to forecast ahead, making them more hesitant to hire new workers, Bloomberg reports.

The share of firms planning for a recession in Canada has declined to 28% from 32%, but still remains higher than in 2024.