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The Canadian GDP declined by 0.4% from the previous quarter in the second quarter of 2025, reversing the 0.5% gain from the earlier period. The quarter’s outcome reflected a sharp fall in exports and weaker business investment in machinery and equipment, partially offset by faster inventory accumulation and stronger household spending. Exports of goods and services declined 7.5%, while imports fell 1.3%. In the meantime, business non-farm inventories accumulated at a much faster pace, adding $30.1 billion to GDP. Still, household spending strengthened (1.1% vs 0.1% in Q1), even as corporate incomes and investment softened and federal revenues fell; government expenditures rose 1.8% in the quarter. On an annualized basis, the Canadian GDP contracted by 1.6%, well below expectations of a 0.6% contraction.