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BMO Lifts Its 2026 Canada GDP Growth Estimate After Strong Q2 Trade Data

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BMO Capital Markets said it lifted its Canadian gross domestic product growth estimate after Tuesday's trade data confirmed that the economy staged a strong rebound in the second quarter, following two consecutive quarters of negative growth.

The bank now forecasts second-quarter GDP growth at 3.8% annualized, up from an earlier 3.0%, raising its full-year 2026 growth forecast to 1.0% from 0.8%, according to a Wednesday note.

A solid increase in machinery and equipment investment is expected to complement the boost from net exports, supported by steady -- though not strong -- consumer spending and signs that residential investment is stabilizing. Government spending is also expected to contribute to overall growth, added the bank.

"This mutes the recession talk in Canada", wrote BMO economists in the note.

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