Surprise bounceback may be shortlived, with early data for October looking weaker.

The Canadian economy topped expectations with a sharp rebound in the third quarter as a stronger trade balance helped fuel the recovery from a tariff-driven contraction.

Statistics Canada said Friday that real gross domestic product rose 2.6% on an annualized basis in the third quarter of 2025. That’s well above expectations from both the Bank of Canada and a poll of economists heading into the release for 0.5% annualized growth.

The figures also mark a rebound from a contraction of 1.8% in real GDP for the second quarter as U.S. tariffs took hold on the Canadian economy. Those results were revised two tenths of a point lower from earlier Statistics Canada reports.

BMO chief economist Doug Porter said in a note to clients Friday that while the headline growth rate was a pleasant surprise, the details were more mixed, with a pullback in imports driving the gain.