National Bank Sees Canada's GDP Growing 1.0% This Year But Trade Uncertainty Is Main Risk

08:15 AM EDT, 05/26/2026 (MT Newswires) -- The Canadian economy remains under pressure despite the resource sector's strong performance, as trade tensions with the United States continue to hold back non-resource exports, said National Bank of Canada.

Amid this climate of uncertainty, the labor market is experiencing its worst start to the year since 2009 -- excluding the COVID-19 pandemic -- with widespread job losses, particularly acute in Quebec, noted the bank.

Rising oil prices linked to geopolitical tensions are eroding household purchasing power, weighing on consumption, while rate increases and population contraction are further dampening real estate activity, stated National Bank.

Despite the energy shock, underlying inflationary pressures remain contained in Canada, in stark contrast to the U.S., which argues for the Bank of Canada to maintain the status quo this year, added the bank.

In National Bank's baseline scenario, the Canadian gross domestic product is projected to grow by 1.0% this year, supported by a renewal of the CUSMA trade deal, although trade uncertainty remains the main risk to the economic outlook.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.