Canada's Economy Contracts Amid Tariff Tensions and Harsh Weather

Canada's GDP shrank by 0.2% in February due to declining activities in mining, oil and gas, and construction, exacerbated by U.S. tariff threats. Adverse weather further contributed to the slowdown. The economy is projected to marginally recover in March, ending the first quarter with 1.5% growth.

Canada's economy faced a setback as GDP fell by 0.2% in February, breaking a growth streak since November, according to data released Wednesday. Key sectors such as mining, oil and gas, and construction experienced downturns, impacted by U.S. tariff threats which disrupted market dynamics and hindered investments.

The overall decline was partly due to severe weather conditions, including snowstorms across multiple provinces. Analysts had predicted a stagnant February, aligning with Statistics Canada's earlier estimates. January's GDP showed a 0.4% growth, but the future remains uncertain.

Economists forecast a slight March expansion by 0.1% with a 1.5% annualized growth in Q1. Amidst challenges from U.S. tariffs, the Bank of Canada anticipates economic struggles ahead. Interest rate changes remain uncertain, with a potential pause predicted by mid-year amid fluctuating currency values and bond yields.

(With inputs from agencies.)