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2025-07-30 22:10:20
[Bank of Canada expects GDP to shrink by 1.5% in the second quarter] The Bank of Canada kept its key interest rate unchanged at 2.75%, although it expects the economy to shrink by an annualized 1.5% in the second quarter after growing by 2.2% in the first quarter, reflecting a sharp 25% drop in Canadian exports due to US tariffs. The Bank of Canada said that trade uncertainty has dragged down business investment and household spending, but this has been partially offset by increased government spending. Under the bank's scenario, if the current tariff backdrop remains largely unchanged, policymakers expect average growth to reach 1% in the second half of the year as exports stabilize at a lower level.
