September 29, 2025
RED FM News Desk
A new forecast by Deloitte Canada suggests the country will avoid a technical recession this year. The economy is expected to grow in the third quarter before seeing stronger gains in 2026.
Last month, Statistics Canada reported that the country’s real gross domestic product (GDP) had dropped by 1.6% on an annualized basis in the second quarter, largely due to a decline in exports and business investment.
However, Deloitte’s fall forecast predicts the Canadian economy will avoid two consecutive quarters of contraction. It anticipates an annualized growth of 1.2% in the third quarter, followed by a 1.5% increase in the final quarter of 2025.
The report also mentions that U.S.-imposed sector-specific tariffs will continue to hurt Canada’s manufacturing industries. Still, it notes that the country faces a lower average U.S. tariff rate compared to other nations, which is helping to minimize economic damage.
According to Deloitte Canada, the Bank of Canada is expected to cut its policy interest rate to 2.25% by the end of the year, which should create more favorable financing conditions.
Overall, the report projects the Canadian economy will grow by 1.3% this year, followed by 1.7% growth in 2026.
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