Canada’s GDP Shrank by 1.6 Percent in Second Quarter of 2025

Canada’s Gross Domestic Product (GDP) shrank by 1.6 percent on an annualized basis in the second quarter of 2025 due to a decline in exports and business investment stemming from U.S. tariffs, after rising by 0.5 percent in the first quarter.

Statistics Canada said in its Aug. 29 briefing that these declines were offset by businesses accumulating inventory, higher household spending, and lower imports of various goods. Overall, Canada’s economy grew at an annualized rate of 0.4 percent in the first six months of the year.