Canada’s economy surprises with 0.8% growth in the second quarter

Canada’s Gross Domestic Product (GDP) expands by 0.8% QoQ in the second quarter, according to data released by Statistics Canada on Friday. The economy accelerated significantly from the 0.1% growth recorded in the first quarter, which was revised higher from an initial estimate of 0%.

On an annualized basis, Canadian GDP grew 3.3% in the second quarter, up from the upwardly revised 0.3% increase in the previous quarter but slightly below market expectations of 3.4%.

The monthly figures also provide an encouraging signal. GDP rose by 0.3% MoM in June, maintaining May's pace and exceeding expectations for a slowdown to 0.2%.

Statistics Canada reports that second-quarter growth was driven by stronger exports, household spending and business capital investment. Exports increased by 3.6%, marking their strongest quarterly rise since the first quarter of 2023, while household consumption expenditure advanced by 0.8%.

Business investment also strengthened during the quarter, supported by machinery and equipment as well as engineering structures. Meanwhile, real GDP per capita increased by 1%, as Canada's population declined for a third consecutive quarter.