Canada's economy grows at a 3.3% annualized pace in the second quarter as exports rebound
Real GDP rose 0.8% in Q2 2026, or 3.3% annualized, Statistics Canada said on 28 August, beating the Bank of Canada's forecast as car exports recovered.
Canada's real gross domestic product rose 0.8% in the second quarter of 2026, Statistics Canada reported on 28 August. At an annualized rate, that's growth of 3.3%, the fastest pace since early 2023 and above the 2.5% the Bank of Canada had forecast for the quarter.
Growth in the first quarter was revised up slightly, from 0.0% to 0.1%.
What drove growth
- Exports rose 3.6%, the biggest increase since the first quarter of 2023. Exports of passenger cars and light trucks jumped 27.0% as auto production recovered from declines in the previous two quarters.
- Household spending and business investment also increased. According to The Canadian Press, business capital investment rose after five straight quarterly declines.
- A drawdown in inventories held growth back.
Real GDP per capita rose 1.0%, faster than GDP as a whole, because Canada's population declined in the quarter.
A strong June, then a flat July
Monthly figures showed GDP up 0.3% in June, while Statistics Canada's early estimate for July pointed to no growth.
What it means for the Canadian dollar
A strong quarter and a weak jobs report pull the Bank of Canada in different directions: employment fell by 42,000 in August and wage growth slowed to 2.0% (details). The Bank has kept its policy rate at 2.25% for seven straight decisions (report). For USD/CAD, oil prices and the Federal Reserve are the other big inputs.
Canada and the US headline annualized growth, while the UK, euro area and Australia report quarter-on-quarter figures. GDP explained shows how to compare them.
Sources
Common questions
How much did Canada's economy grow in Q2 2026?
Real GDP rose 0.8% in the second quarter of 2026, or 3.3% at an annualized rate, according to Statistics Canada.
Why did Canada's GDP grow in the second quarter of 2026?
Exports rose 3.6%, led by a 27.0% jump in exports of passenger cars and light trucks, and household spending and business investment also increased.
What does annualized GDP growth mean?
It is the growth rate the economy would reach over a year if the quarter's pace continued for four quarters. Canada's 0.8% quarterly growth equals 3.3% annualized.
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