Capital Economics: The Canadian economy will struggle to grow in the second half of the year and will hover on the brink of recession.

The compliance of the USMCA agreement and Canada's reduction in anti-tariffs are helping to alleviate the impact of the trade war on the Canadian economy, and the possibility of avoiding a contraction in GDP in the third quarter is increasing, according to Michael Davenport of Capital Economics. However, he added that the intensification of the trade war, market sentiment, uncertainty in capital expenditure, and hiring may continue to worsen. Following a quarterly GDP contraction of 0.4% and 1.6% in the second quarter, Davenport expects that the Canadian economy will struggle to grow in the second half of the year and remain on the brink of recession.