Canada’s Economy Shows Signs of Life Amidst Tariff Uncertainty
The Canadian economy grew 2.6 per cent in the fourth quarter of 2024, beating expectations and driven by higher spending on vehicles, increased exports, and business investments. This unexpected growth may provide some relief to businesses and investors, but economists caution that tariff uncertainty could still weigh heavily on the economy. The Bank of Canada's next interest rate decision will be closely watched, as policymakers consider whether the recent data is enough to justify further rate cuts.
- The surprise boost in fourth-quarter growth highlights the vulnerability of economic forecasts to unexpected shocks, underscoring the need for policymakers to carefully balance their expectations with the complexities of real-world data.
- How will the Bank of Canada navigate the tightrope between supporting a fragile economy and protecting against potential risks posed by escalating trade tensions?