Canada Q1 GDP flat, missing 1.5% growth forecast sharply

Canada's economy stalled in the first quarter of 2026, with real GDP unchanged, sharply missing the 1.5% growth forecast and following a 0.2% contraction in the prior quarter.

The flat reading was driven by higher imports of goods, particularly gold, which were offset by accumulations of business inventories. Decreased business and government capital investment was counterbalanced by higher household spending, as final domestic demand edged 0.1% lower. On a per capita basis, real GDP increased 0.2% as the population declined for a second consecutive quarter. The Canadian dollar weakened on the release, as the data continues to surprise to the downside, reinforcing expectations that the Bank of Canada may need to deliver further rate cuts. For forex traders tracking the loonie, the move is visible on NowPrice's live fx dashboard, where USD/CAD and other CAD pairs react in real time to economic surprises.

Looking ahead, the market will focus on upcoming Canadian employment and inflation data for further clues on the BoC's policy path. A continued run of weak data could accelerate expectations for a rate cut at the next meeting, while any upside surprises might offer temporary relief for the Canadian dollar. Traders should also monitor global risk sentiment and commodity prices, given Canada's status as a major exporter.