The Bank of Canada expects the GDP to contract by 1.5% in the second quarter.

The Bank of Canada will keep its main interest rate unchanged at 2.75%, despite the bank's forecast that the economy will contract at an annual rate of 1.5% in the second quarter, following a 2.2% growth in the first quarter, reflecting a significant 25% decrease in Canadian exports due to US tariffs. The Bank of Canada stated that trade uncertainty has dragged down business investment and household spending, but this has been offset by increased government spending. According to the bank's projections, the current tariff environment is expected to remain largely unchanged, with policymakers anticipating an average growth rate of 1% in the second half of the year as exports stabilize at lower levels.