Canada's Economy Rebounds Amid US Tariffs Challenge
Canada's GDP grew 0.2% in July, rebounding from three months of contraction, driven by mining and manufacturing despite US tariffs impacting economic sectors. Analysts expect no growth for August but avoid recession. With services and goods sectors mixed, future rate cuts hinge on upcoming jobs and inflation data.
Canada's economy displayed resilience in July, with the GDP growing by 0.2% after experiencing contraction over the previous three months, according to recently released data.
Mining, manufacturing, and wholesale trade played pivotal roles in the upward trajectory, despite the U.S.'s tariff impositions which have increasingly strained crucial sectors. While the preliminary estimate for August indicated stagnant growth, it soothed worries of an impending recession. Notably, the goods-producing industries grew by 0.6%, and mining, quarrying, and oil and gas extraction soared by 1.4%.
Economists are closely observing the job market and inflation figures due later in the month as these will significantly influence the Bank of Canada's decision on rate cuts scheduled for October. As the prospective rate cut looms, the Canadian dollar has gained strength against the U.S. dollar, reflecting cautious optimism among investors and traders.
(With inputs from agencies.)
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