2025.08.2912:40:28UTC+00Canada GDP Contracts in Q2

In the second quarter of 2025, Canada's GDP experienced a decrease of 0.4% from the previous quarter, counteracting the 0.5% increase recorded earlier. This decline is attributed primarily to a significant drop in exports and reduced business investment in machinery and equipment. These negative impacts were somewhat mitigated by accelerated inventory accumulation and heightened household spending. Specifically, exports of goods and services plummeted by 7.5%, while imports dipped by 1.3%. Meanwhile, business non-farm inventories grew at a substantially quicker rate, contributing an additional $30.1 billion to GDP. Despite the downturn in corporate income and investment, along with a reduction in federal revenues, household spending improved, rising by 1.1% compared to a mere 0.1% in the first quarter. Additionally, government expenditures increased by 1.8% during this period. When viewed on an annualized basis, Canada’s GDP contracted by 1.6%, a figure that significantly surpasses the anticipated contraction of 0.6%.