Canada Faces Economic Chill: GDP Drops Amidst Tariffs and Sluggish Investment
Canada's economy saw a dip in April with a 0.1% decline in GDP, largely driven by a 0.6% drop in goods-producing industries. The contraction hints at a sluggish second quarter, influenced by U.S. tariffs and muted business investments, with key sectors like manufacturing and wholesale trade leading the decline.
The Canadian economy took a hit in April as the Gross Domestic Product (GDP) contracted by 0.1% on a monthly basis, Statistics Canada reported. A 0.6% decrease in goods-producing industries, pivotal contributors to the GDP, amplified the downward trend amidst ongoing tariff challenges.
While positive activity emerged in finance and public administration, it wasn't enough to offset declines in manufacturing and wholesale trade sectors. Analysts had held expectations for a stagnant output in April, whereas Statistics Canada revised March's minuscule growth to 0.2%.
Prospects for May don't look brighter as early estimates suggest another 0.1% GDP contraction. Should this back-to-back decline materialize, the second quarter could reveal deeper impacts of U.S.-imposed tariffs, with economic indicators pointing to weakened growth and potential interest rate cuts by the Bank of Canada.
(With inputs from agencies.)
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