The Canadian economic activity grew above expectations in the third quarter, 2.6% year-on-year, thanks to a slight increase in exports and the biggest drop in imports since 2022.
The trade war of the American president donald trump has stopped the growth from its northern neighbor and has darkened its trade prospects.
The gross domestic product (GDP) Canadian contracted 1.8% year-on-year in the second quarter of 2025 and the Bank of Canada I was expecting a growth of just 0.5% for the third quarter.
Exceeds expectations
Katherine Judgean economist at CIBC, pointed out that the growth of the 2.6% announced by Statistics Canada “far exceeds expectations”, although “the composition of the growth It wasn’t ideal.”
Judge highlighted that the 8.6% decrease in imports was the main driver of the growthwhile exports increased only slightly (+0.7%).
Statistics Canada also indicated that the increase in capital investment was driven by the public spendingwhile business investment remained stable.
- Regarding government investments, the data reveal an 82% increase in military spending.
Since taking office in March, Prime Minister Mark Carney has promoted the modernization of outdated military equipment Canada.
He argues that the country needs to invest large sums to meet spending targets set by the NATO military alliance and to defend the country’s sovereignty in a time of growing threats.
