Royal Bank of Canada (RBC) economist Claire Fan projects that Canada's economy will experience a cyclical rebound in the second quarter of 2026, driven by resilient household spending, a recovery in business investment, and expanding net trade [1]. Growth is anticipated to persist through the latter half of 2026, with CUSMA exemptions continuing to shield most Canadian exports from U.S. tariffs [1].
RBC expects the Bank of Canada to maintain its current interest rate stance throughout 2026, citing broadly easing energy price growth and firming economic growth as factors supporting this steady policy approach [1]. Despite ongoing uncertainties related to trade and energy prices, recent developments have aligned with expectations, reinforcing the central bank's decision to hold rates steady [1].
No specific market reactions or analyst opinions beyond RBC's projections are mentioned in the article. The report does not provide concrete figures such as GDP growth rates, interest rate levels, or specific export values [1].
CONCLUSION
RBC anticipates a Canadian economic rebound in 2026, supported by strong consumer spending, business investment, and trade, while the Bank of Canada is expected to keep interest rates unchanged. Persistent uncertainties in trade and energy prices remain, but recent trends support a steady policy outlook.