- Prior was +2.6%
- GDP -0.2% q/q vs +0.6% prior
- Real GDP increased 1.7% in 2025
- Exports rose 1.5% in the fourth quarter, after increasing 0.9% in the third quarter.
- Imports rose 0.3%
- December GDP +0.2%
The number might not be as bad as it looks as the fourth quarter decrease was largely due to withdrawals of business inventories following inventory accumulations in the third quarter.
For the full year, Canada grew 1.7% in 2025 — the weakest pace since the pandemic year of 2020. The culprit? US-bound exports that never fully recovered after a rough Q2.
This is a soft print on the surface and the annual growth figure will raise eyebrows, but the inventory story gives the Bank of Canada some cover to avoid reading too much into it. The BOC already cut four times in 2025, and with the household saving rate holding up at 4.9% for the year and compensation of employees still growing, it’s not a recessionary alarm bell.
Watch the per capita number though — that was flat in Q4 after +0.5% prior.
Other good news was in the December report. The manufacturing sector rose 1.2% in December. A rebound in machinery manufacturing (+6.6%) largely recouped the declines recorded in the two preceding months.
USD/CAD is flat on the day at 1.3679 but rose about 10 pips on this report. The loonie had been higher on the day before the data in large part due to the jump in oil prices today (because of expectations of a US attack on Iran).
This article was written by Adam Button at investinglive.com.