Canada’s Economy Grows 3.3% in Q2, Fastest Pace Since Early 2023

Canada’s economy grew at an annualized rate of 3.3% in the second quarter of 2026, marking its strongest quarterly expansion since early 2023 and easing concerns that the country could slip into a technical recession. The latest figures from Statistics Canada showed a sharp rebound from the first quarter, which was revised upward to 0.3% growth.

The growth was driven by a strong increase in exports, which rose 3.6%, along with stronger household spending and a recovery in business investment. Auto exports, in particular, provided a significant boost to Canada’s international trade. Business investment also rebounded, while consumer spending continued to strengthen.

The first-quarter revision means Canada avoided a technical recession, generally defined as two consecutive quarters of economic contraction. The second-quarter performance also came in well above the 2.5% growth forecast previously issued by the Bank of Canada.

On a monthly basis, GDP increased 0.3% in June, while Statistics Canada’s preliminary estimate suggests the economy was flat in July, pointing to a softer start to the third quarter.

Despite the strong quarterly rebound, economists remain cautious as trade tensions with the United States continue to pose risks to Canada’s economic outlook. Meanwhile, money markets expect the Bank of Canada to keep its benchmark interest rate at 2.25% for a seventh consecutive meeting.