Summary
Canada’s 3Q25 GDP surprised on the upside, showing 2.6% growth, after contracting by a revised 1.8% in 2Q. The boost was attributed to crude oil exports and increased government spending. Canada’s central bank held interest rates steady at their December 10 meeting amid the stronger-than-expected GDP report, while highlighting the economy’s resilience. Royal Bank of Canada, the country’s largest bank by assets, was also optimistic about its operating environment when reporting fiscal 4Q results recently, noting that “fiscal and monetary policy has limited the impact of persistent sectoral and regional trade tensions, while other parts of the economy remain resilient.” Trade policy uncertainty and slower population growth have resulted in headwinds for the Canadian economy, and weaker consumption spending bears watching. But Royal Bank did offer counterbalances, saying that “the ongoing shift towards a service-oriented economy should also offset some of the trade-related headwinds.” In a very encouraging sign for its capital markets businesses, Royal Bank said it was “engaged i