Canada's GDP grew by annualized rate of 2.2% in first quarter

Thomson Reuters

· Posted: May 30, 2025 8:38 AM EDT | Last Updated: 3 hours ago

Canada's system grew by 2.2 per cent connected an annualized ground successful the archetypal quarter, Statistics Canada said connected Friday, expanding astatine a complaint faster than expected.

The maturation was chiefly driven by exports arsenic companies successful the United States rushed to stockpile earlier tariffs by U.S. President Donald Trump.

But an summation successful imports that led to inventory build-up, little household spending and weaker last home request indicates that the system was battling connected the home front.

Economists person warned that arsenic tariffs proceed connected Canada, this inclination volition persist.

This is the last economical indicator earlier the Bank of Canada's rates determination connected Wednesday and volition assistance find whether the cardinal slope volition chopped oregon enactment pat connected involvement rates.

"I deliberation the bottommost enactment present is the system held up amended than astir most had expected. We were looking for a decent archetypal 4th but it was amended than decent," Douglas Porter, main economist astatine BMO, wrote successful a enactment to clients.

"We tin instrumentality retired the details of the first-quarter numbers — they're not astir arsenic beardown arsenic the header would suggest," helium said.

"But inactive the wide fig is nevertheless important here. There's nary existent motion of distress successful the system from the GDP figures and I deliberation that's the astir important message."

Tariff flip-flop upped exports, imports

Trump's repeated threats and flip-flops connected tariffs since the opening of the twelvemonth led to an summation successful exports and imports to and from the U.S.

Trump imposed tariffs connected Canada successful March, archetypal connected a slew of products and aboriginal specifically connected alloy and aluminum.

The GDP grew by 0.1 per cent in March aft a contraction of 0.2 per cent in February. The system is apt expected to grow by 0.1 per cent in April, the statistic bureau said, referring to a flash estimate.

The March maturation was chiefly driven by a rebound successful the mining, quarrying, and lipid and state extraction and operation sectors.

Analysts polled by Reuters had expected first-quarter GDP to grow by 1.7 per cent and by 0.1 per cent in March.

The tariffs and the uncertainty astir them started showing aboriginal signs of interaction arsenic the last home demand, which represents full last depletion expenditures and concern successful fixed capital, did not summation for the archetypal clip since the extremity of 2023, Statistics Canada said.