Canada's economy showed signs of recovery in July, growing for the first time in four months. Statistics Canada reported a 0.2 percent increase in gross domestic product (GDP) compared to June. This growth slightly exceeded analysts' expectations, which had predicted a 0.1 percent rise.

The July GDP figures mark the initial report of economic performance for the third quarter of 2025, which runs until September. However, it remains uncertain whether Canada has avoided a recession, as further data will be needed later this year to clarify the economic outlook.

In the second quarter of 2025, from April to June, the Canadian economy contracted by 0.4 percent compared to the first quarter. Additionally, it was down 1.6 percent compared to the same period in 2024.

The growth in July was driven by a rebound in goods-producing industries. Notably, the mining and quarrying sector saw a significant increase of 2.6 percent, while oil and gas extraction rose by 0.9 percent. The manufacturing sector also experienced gains, along with transportation and warehousing, following declines in June.

Despite the positive growth in July, early estimates for August indicate a flat GDP. Increases in wholesale and retail trade were counterbalanced by declines in manufacturing, oil and gas extraction, and transportation and warehousing.

As the economic landscape continues to evolve, further updates will provide more clarity on Canada's economic trajectory.