The latest economic growth figures come one week after the Bank of Canada lowered its key interest rate for a second time in a row.
Governor Tiff Macklem said the central bank’s decision was partly driven by weakening economic conditions.
“That need for growth to pick up was something that was part of our decision to cut the policy interest rate,” Macklem said on July 24.
Labour market is challenging, especially for newcomers and grads
While the economy has not dipped into a recession, growth has been meagre, particularly when taking population growth into account.
The labour market has also felt the weight of high borrowing costs, with graduates and newcomers particularly affected by dwindling job opportunities.
The unemployment rate has steadily climbed over the last year, reaching 6.4% in June.
The Bank of Canada’s interest rate cuts are expected to take some of the pressure off of the economy, though at 4.5%, its benchmark rate continues to restrict economic growth.
Will we see a third interest rate cut?
Many forecasters expect the Bank of Canada to follow up with another interest rate reduction in September.
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