First-quarter annualized GDP contraction of 0.1% undershot expectations for 1.5% growth, signaling weaker economic momentum.
Canada’s economy posted an annualized 0.1% decline in the first quarter of 2026, falling short of the 1.5% growth forecast. The quarterly reading was flat after a 0.2% contraction in Q4 2025, while March saw a 0.1% monthly drop.
Markets had anticipated a rebound following the prior quarter’s contraction, but weak domestic demand and external trade weighed on output. Annualized figures extrapolate quarterly trends, which can amplify temporary shocks.
The Canadian dollar weakened slightly, with USD/CAD rising 0.25% to 1.3820 following the data release.