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Canada's Domestic Economy Proves Resilient in Q2 GDP, BMO Says

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Canadian domestic demand remained resilient in second-quarter gross domestic product, with final domestic demand up 1.5% annually, broadly sustaining the steady growth trend seen since mid-2025 despite quarter-to-quarter volatility, according to BMO Capital Markets in a note.

Consumer spending has continued to grow at just under 2%, wrote the bank in a Monday note.

Canada's GDP rebounded sharply in the second quarter according to data released on Friday, expanding at a 3.3% annualized pace after two sluggish quarters.

However, the strong headline growth was largely driven by volatile swings in exports and inventories, leaving underlying momentum considerably weaker, added BMO.

Overall, Canada's underlying momentum remains subdued, but domestic activity continues to hold up relatively well despite persistent headwinds, said the bank

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