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Canada's defense spending boost expected to slightly increase GDP, but recession looms due to trade uncertainties.
A new report by Oxford Economics indicates that Canada's increased defence spending will only marginally boost its real GDP by 0.1 percentage points this year and next, reaching 0.9% growth annually in 2025 and 0.4% in 2026.
Despite these plans, the report suggests that Canada is still headed for a recession, with ongoing U.S. trade policy uncertainties and new tariffs causing firms to delay investments, leading to job cuts and increased unemployment.
The Bank of Canada is expected to maintain a policy rate of 2.75%, but inflation is predicted to rise to 3% by mid-2026, limiting monetary stimulus options.
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Se espera que el aumento del gasto en defensa de Canadá aumente ligeramente el PIB, pero se avecina una recesión debido a las incertidumbres comerciales.