Bank of Canada cuts growth forecasts, cites U.S. trade policy impact By Investing.com
Update: 2025-10-29
Description
The Bank of Canada has revised its economic growth forecasts for 2025 and 2026 due to challenges stemming from U.S. trade policies. The economy is now expected to grow by 1.2% in 2025 and 1.1% in 2026, down from previous projections. The downward revision is primarily due to the negative impact of new tariffs and increased uncertainty, particularly for Canadian businesses reliant on U.S. trade. Inflation is projected to average 2% in 2025 and slightly increase to 2.1% in 2026 and 2027. The Bank of Canada expects modest growth in the third and fourth quarters of 2022, with the output gap estimated to be between -1.5% and -0.5%. These forecasts highlight the significant impact of U.S. trade policies on Canada's economic prospects and the need for businesses to adapt their plans accordingly.
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