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ForexMedium•27 February 2026•

1 min read

Canada’s Economy Unexpectedly Contracts by 0.6% in Fourth Quarter

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Key Facts

1Canada's real GDP contracted at an annualized rate of 0.6% in the fourth quarter.

Canada's real GDP contracted at an annualized rate of 0.6% in the fourth quarter, according to the latest government data. The figure came in significantly below market expectations, as analysts had forecasted flat growth of 0% for the period. This contraction marks a sharp reversal from the robust 2.4% growth rate recorded in the previous quarter. The unexpected decline indicates a significant slowdown in economic activity across the country. Market participants suggest that this economic weakness may prompt the Bank of Canada to adopt a more dovish stance on interest rates. Consequently, the Canadian Dollar faced immediate downward pressure against major currency counterparts following the announcement.