Canada's economy grew at an annualized rate of 2.2% in the first quarter of 2025, exceeding market forecasts. The growth was primarily driven by strong exports, as businesses rushed to stockpile goods ahead of anticipated tariffs.
Despite the positive headline figure, domestic demand showed signs of weakness, with household spending slowing to 0.3%, compared to 1.2% in the previous quarter. Business investment in machinery and equipment, however, provided a boost, increasing by 5.3%.
The latest GDP data comes just days before the Bank of Canada's rate decision, which could influence monetary policy moving forward. Analysts had expected a 1.7% growth rate, making the 2.2% expansion a welcome surprise.
With uncertainty surrounding trade policies and consumer spending trends, economists will be watching closely to see if this momentum continues into the second quarter.
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