Canada’s Economy Surprises With 2.2% Growth in Q1, Fueled by Pre-Tariff Export Surge
Canada's economy grew faster than expected in the first quarter of 2025, powered by a sharp rise in tariff-driven exports that offset broader domestic weakness, according to new data from Statistics Canada published Friday and highlighted by Bloomberg.
Gross domestic product (GDP) expanded at an annualized rate of 2.2%, slightly above the 2.1% posted in the final quarter of 2024. The figure also surpassed the Bank of Canada’s (BoC) forecast of 1.8% and exceeded even the most optimistic expectations in a Bloomberg economist survey.
Export Surge Offsets Domestic Slowdown
The Q1 growth was driven largely by a rush in exports and inventory buildup, as Canadian businesses moved to front-run potential tariffs amid uncertainty related to U.S. trade policy under President Donald Trump. This strategic push likely gave GDP a temporary lift, masking signs of sluggish consumer spending and weaker business investment, both of which continue to reflect underlying economic fragility.
March GDP rose by 0.1%, consistent with forecasts, with gains led by resource extraction, particularly mining, oil, and gas. Preliminary data suggests another 0.1% increase in April, with the finance sector also contributing to the momentum.
Outlook: Temporary Lift or Sustainable Trend?
While the latest data suggest the Canadian economy remains resilient, analysts caution that the current pace may not be sustainable. The export-driven bump, largely tied to tariff avoidance, could fade quickly, especially if domestic demand continues to weaken. The slowdown in U.S. consumer spending, released concurrently, adds another layer of caution to the outlook.
With trade policy volatility and tightening financial conditions still in play, the coming months will be critical in determining whether Canada can maintain this growth trajectory — or if it merely reflects a short-term response to geopolitical uncertainty.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
