Canadian Economy Contracts, Central Bank Expected to Maintain Interest Rates

Canada's economy unexpectedly contracted in the second quarter, with a decline of 0.2% at an annualized rate, and growth is expected to be flat in July. This result is likely to prompt the central bank to hold interest rates amid concerns of a possible recession. The decline in GDP was attributed to decreases in housing investment, smaller inventory accumulation, slower international exports, and household spending. The Bank of Canada is expected to keep interest rates unchanged at its upcoming policy decision.