🇨🇦❗️Cable FX Macro Weekly Note: Canada 1Q GDP Growth

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Canadian 4Q output saw real GDP expanding by 0.6% Q/q following a 0.5% increase in Q3 2024. Annualized, this translates to a 2.4% growth rate, driven by higher household consumption, increased exports, and business investment, though tempered by inventory drawdowns and higher imports. For the full year of 2024, real GDP expanded by 1.4%.

Preliminary data suggests real GDP grew by 0.4% in Q1 2025, with a flash estimate of 0.1% month-on-month growth for March 2025. However, February 2025 saw a 0.2% month- on-month decline, led by contractions in goods-producing industries (-0.6%), particularly mining, quarrying, and oil and gas extraction (-2.5%), and construction (-0.9%). Services- producing industries edged down by 0.1%. Overall, Q1 2025 growth is tracking around 1.5%, slightly below the Bank of Canada’s projections.

The desk at RBC said gross domestic product data on Thursday will show the Canadian economy grew by 1.8% annualized in Q1. For expenditures, RBC expects to see an increase in household consumption in Q1 that was partially offset by a contraction in residential investment as home resales cooled. Business investment likely inched higher, but is expected to soften in the coming quarters as businesses freeze spending plans amid disruptive trade policies.