Canada's Economy Continues "Hanging in There", Likely Keeping Central Bank on Hold, Says BMO

11:18 AM EDT, 04/30/2026 (MT Newswires) -- The Canadian economy continued its decent start to the year with February gross domestic product climbing 0.2%, as expected, said Bank of Montreal (BMO) after Thursday's data.

Strength came in manufacturing, transportation/warehousing and wholesale trade, or up 0.9% month over month. However, only eight of 20 sectors grew in the month, highlighting that the economy continues to struggle despite the decent headline, noted the bank.

The March GDP flash showed activity was unchanged in the month, though the Q1 GDP flash growth came in at 1.7% annualized, a touch better than BMO and the Bank of Canada's 1.5% forecast.

"Unfortunately," the flat March provides a tougher handoff for Q2, so unless Canada gets a strong April, BMO expects some deceleration in GDP growth.

The economy continues to "hang in there" despite the ongoing dark cloud of trade uncertainty, added the bank. Canada now has the added shock of higher energy prices to deal with.

Statistics Canada noted that retail activity weighed on March, so there appears to be some early impact.

All told, there's nothing here to move the needle for the BoC, with growth about as expected, according to BMO. Policymakers are watching energy prices and the potential pass-through to core inflation.

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