The Bank of Canada has held the overnight interest rate at 2.75%, with the Bank Rate remaining at 3.00%.
This decision reflects ongoing uncertainty tied to U.S. tariffs, global trade tensions, and their impact on the Canadian economy.
Global Economic Outlook 2025
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U.S. economic growth slowed in early 2025, though the labour market remains resilient.
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The Eurozone posted modest gains, while China offset export losses to the U.S. with gains in other markets.
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Oil prices remain stable; global equity markets are strong; and the Canadian dollar has strengthened against a weakening U.S. dollar.
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Global GDP growth is forecasted to slow to 2.5% by the end of 2025, with a projected rebound to ~3% in 2026–27.
Canadian Economic Forecast: Mid-2025
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Canada’s GDP likely contracted by 1.5% in Q2 2025, following a Q1 export surge ahead of tariffs.
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Unemployment in Canada rose to 6.9% in June 2025, while wage growth continues to ease.
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Economic slack has widened, especially in trade-sensitive sectors.
Canadian Economic Outlook:
Under the current tariff scenario, GDP growth in Canada is expected to rebound to ~1% by late 2025 and reach close to 2% by 2027.
Posted by Ray Yang on
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