Canada’s economy grows 2.6%, beating forecasts and avoiding recession

Stronger-Than-Expected Growth

Canada’s economy posted a 2.6% annualized growth rate in the third quarter, exceeding forecasts and allowing the country to sidestep a recession. The growth figures came in stronger than the Bank of Canada’s expectations, signaling resilience in consumer spending and business investment despite higher interest rates.

Broader Economic Context

Analysts had anticipated slower output due to persistent inflation and global demand pressures. However, robust performance in several key sectors, including energy production and services, supported the overall expansion. The result provides some relief for policymakers and raises hopes for a more stable economic outlook heading into the next quarter.

“The 2.6% growth rate suggests the Canadian economy remains more resilient than expected,” noted one financial analyst.

Outlook for Policy and Growth

With inflation still above target, the Bank of Canada may continue to monitor data closely before adjusting its policy stance. Economists caution that growth could moderate in early 2026 as rate effects continue to filter through to households and businesses.

Author’s summary:
Canada’s economy expanded 2.6% in Q3, surpassing forecasts and showing resilience against inflation and rate pressures, keeping recession risks at bay.

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Financial Post Financial Post — 2025-11-28

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