The Canadian economy may still be struggling to grow. Some economists, weighing in on the latest real gross domestic product (GDP) results on Friday, 29 May ’26, argued that weakness may not qualify as a recession.
Statistics Canada (StatCan) reported last Friday, May 29, that the Canadian economy had stalled during the first quarter of this year.
Real GDP per expenditure was flat on a quarter-by-quarter basis. StatCan converted the quarterly figure to an annualized rate. That’s the figure most economists pay close attention to. It magnifies the quarterly changes as well as reflects a quarterly decline of 0.1% during the first quarter.
That follows a real GDP decline of 1% during the 4th quarter of ’25, although StatCan revised to a lower value than previously last Friday.
3 of Canada’s last 4 quarters have now posted negative real GDP growth. 2 consecutive quarterly contractions in a row meet some definitions for a technical recession. However, not all economists weighing in last Friday were convinced.
TD Bank economist Marc Ercolao said, ‘Not to get him wrong, the economy has struggled to gain any meaningful traction over the last year. However, for now, they wouldn’t necessarily term it a technical recession.
He added that the decline in real GDP last quarter was still basically zero. It may be easily revised & scaled up in the future, reports StatCan.
BMO chief economist Doug Porter said in a note to clients that there was ‘no sense in sugar-coating this seemingly sour result. ””The economy has been struggling to grow since the beginning of the trade war.”
Statistics Canada says economic growth stalled in the first quarter. As a result, real GDP fell for the second time in a row. That meets some definitions for a technical recession. However, not all economists who weighed in on StatCan’s report were convinced of the need for the label.
Canadian Press reporter Craig Lord had more details to share. The Lord said that higher imports of gold dragged down activity during the first quarter. Exports were mildly negative. Weak resale activity in the housing market also hurt the first-quarter figures.
