Canada: Economic growth remains stable with signs of partial recovery – RBC

Canadian GDP Growth Pauses, but Recovery Signals Emerge

Economists Claire Fan and Abbey Xu from the Royal Bank of Canada (RBC) anticipate that Canada's GDP remained largely unchanged in January, following a 0.2% increase in December. While the automotive and housing sectors experienced softness, these were balanced by gains in energy and retail. Early data, such as RBC card spending and preliminary figures from Statistics Canada, suggest a partial recovery took place in February, keeping first-quarter growth close to expectations.

Economic Activity Levels Off, Yet Outlook Improves

According to projections based on Statistics Canada's preliminary estimate, GDP growth likely stalled in January after a modest rise in the previous month.

Nonetheless, initial signs indicate that February saw some recovery as earlier disruptions subsided.

Consumer spending strength appears to have persisted into February as well.

During its March meeting, the Bank of Canada highlighted potential downside risks to its 1.8% annualized GDP growth projection for the first quarter.

Despite a sluggish start to the year, expected improvements in February and March—particularly as challenges in the auto sector ease—should keep overall growth aligned with forecasts for a slight uptick.

(This report was produced with assistance from artificial intelligence and subsequently reviewed by an editor.)