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Special Report

Canada GDP Research Brief

June 2023

Canada’s Economy Remained Resilient to Start
2023, Despite Elevated Borrowing Costs

Economy returns to positive growth territory. Canada’s economy grew at a stronger-than-expected pace in the first quarter. Gross domestic product expanded 3.1 per cent annualized, which was above the preliminary estimate of 2.5 per cent. This indicates that Canada avoided recession for the time being as it comes after the economy contracted slightly in the final quarter of 2022. Healthy growth to begin the year was largely due to an uptick in household consumption, which grew 5.7 per cent annualized and helped offset the fall in government spending and residential investment. Looking forward, the latest preliminary estimate suggests that GDP increased 0.2 per cent month-over-month in April, after it was unchanged in March. If the estimates materialize, then GDP growth for the second quarter should surpass the Bank of Canada’s forecast of 1.0 per cent, as it appears likely that GDP rose again in May.

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