On 28/8, Statistics Canada announced figures showing the country's GDP increased by 3.3% in Q2 (annualized). This marks the highest growth rate since 2023, exceeding the Bank of Canada's July forecast of 2.5%.

Exports emerged as a key driver for Q2, with the volume of goods shipped increasing by 3.6%, the highest in over three years.

Domestic demand also saw strong growth, fueled by both consumption and investment. Consumption rose by 0.8%, its strongest in three quarters. Economists attribute this primarily to rising wages and government benefits.

Business investment increased by 2.3% in Q2, following a 1.3% decline. This marks the first growth in this indicator in one and a half years.

These figures indicate Canada's economy is gradually overcoming the impact of over 18 months under US import tariffs. Tariff policies, initiated early in President Donald Trump's term, disrupted North American supply chains and raised costs.

Strong domestic consumption and spending also provide a solid foundation for Canada to withstand the 50% import tariffs recently imposed by US President Donald Trump on 20 billion USD worth of its goods. Canada subsequently retaliated with similar measures targeting US goods.

"It appears households and businesses found ways to cope with trade-related uncertainties before the latest round of tariffs", noted Royce Mendes, CEO of financial services company Desjardins. He cautioned, however, that the upcoming trade outlook will be much more unpredictable.

Canada's Q1 growth rate was also revised up to 0.3%, from a 0.1% decline in the May estimate. This means the country did not fall into a technical recession.

Following the release of GDP figures, the Canadian dollar slightly weakened against the US dollar. Currently, one USD exchanges for 1.38 CAD.

Ha Thu (according to Reuters)