Canada's Economy Surprises with 2.6% Annualized Growth in Fourth Quarter

Boosted by consumer spending, construction, and exports, Canada's economy outperformed expectations despite looming trade uncertainties.

Canada's GDP grew by 2.6% annualized in Q4 2024, surpassing the 1.8% forecast by economists and the Bank of Canada.
Household spending rose 1.4% in the quarter, driven by purchases of vehicles, rent, and services, marking its strongest growth since mid-2022.
Residential construction saw a 3.9% increase, its largest quarterly rise since early 2021, while business investments grew modestly by 0.7%.
Exports of goods and services increased by 1.8% in Q4, led by crude oil, pharmaceuticals, and travel services, though potential U.S. tariffs pose risks.
The Bank of Canada may pause further rate cuts after reducing rates by 200 basis points since June 2024, as the economy shows signs of resilience.