Canada's Q3 GDP Grows 2.6%, Beats Forecasts

Canada's economy expanded at an annualized rate of 2.6 percent in the third quarter, surpassing economists' expectations and averting a technical recession after a contraction in the prior period, Statistics Canada reported Friday.

The growth marked a sharp rebound from the second quarter's downwardly revised 1.8 percent decline, which had been exacerbated by United States tariffs on key Canadian exports. Analysts had forecasted just 0.5 percent annualized growth for the July-to-September period. The stronger performance was primarily propelled by an improved trade balance, with imports falling 2.2 percent, the steepest drop since late 2022, while exports rose modestly by 0.2 percent. Crude oil and bitumen exports surged 6.7 percent, providing a significant lift, alongside a 2.9 percent increase in government capital investments, including an 82 percent jump in spending on weapon systems and rises in nonresidential structures such as hospitals.

Household consumption, however, declined 0.1 percent, reflecting reduced spending on items like passenger vehicles amid subdued consumer sentiment. Business investment remained flat, and new residential construction fell 0.8 percent....