Canada’s economy grew by a greater-than-expected 0.3% in May and looks set to turn in its best annualized quarterly performance for more than three years, official data indicated on Friday.

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[The growth] indicates annualized second-quarter growth of 3.4%, significantly ​higher than the Bank of Canada’s July 15 forecast of 2.5%, and the highest annualized quarterly ​increase since the 4.3% seen in the first three months of 2023.

The central bank left its benchmark overnight rate unchanged at 2.25% on July 15 and said growth would strengthen in the second half of the year as inflation ​pressures eased and firms continued to adapt to U.S. tariffs.

“The economy appears to have found ways ​to navigate the current cloud of uncertainty relating to trade with the United States,” said Royce Mendes, managing director ‌and ⁠head of macro strategy at Desjardins.

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