Fengye Bank: Canada's recent growth is expected to slow down, but recovery is expected to be on track.

Fengye Bank indicated that recent economic data in Canada points to a sluggish start in 2026, with labor market weakness in January and February and very weak trade data in January, indicating a slowdown in overall demand. The bank's economists currently predict that GDP growth in the first quarter will be lower than previously expected, which could mean an average growth rate of 1.3% in 2026. However, Fengye Bank believes that several forces are likely to support a recovery later this year and in 2027, including easing tensions, the effects of past interest rate cuts, and government spending. Therefore, the bank predicts that economic growth in 2027 will accelerate to 2%.