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Special Report

Canada GDP Research Brief

June 2024

Odds Increase for June Rate Cut as Economic
Growth Comes in Softer than Expected

Canada’s economy continues to expand. Real gross domestic product grew at an annualized rate of 1.7 per cent in the first quarter. This was driven by higher household spending on services, while slower inventory accumulations moderated overall gains. Despite economic growth being up from the annualized rate of 0.1 per cent in the fourth quarter of last year, it was slower than the 2.2 per cent pace forecast by analysts, as well as the Bank of Canada’s 2.8 per cent estimate. This softer than expected growth indicates the nation’s economy did not rebound as strongly as initial data suggested, with the full impact of elevated borrowing costs continuing to be absorbed. Moderating growth lends further support to a midyear interest rate cut, with money markets increasing their bets for June.

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