After Canada’s economy slipped into a technical recession last week, a new outlook by the Organisation for Economic Co-operation and Development, or OECD, said on Wednesday said that GDP growth is set to rebound later in the year and continue growing into 2027.

“GDP growth is expected to strengthen over 2026 and 2027,” the OECD said in a note about Canada’s economy on Wednesday.

Canada’s GDP growth is expected to reach 1.2 per cent by the end of 2026 and strengthen further in 2027, reaching 1.7 per cent, the OECD outlook said, as the Canadian economy recovers from the shock of U.S. President Donald Trump’s tariffs.

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“Household consumption and government spending on defence and infrastructure will continue to underpin growth, while business investment should recover gradually,” the report said.

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Canada’s position as a net energy exporter will help exports grow over the next two years. Canadian exporters are set to benefit from higher energy prices linked to the Middle East conflict, it said.

While inflation in Canada could rise in the near-term, it will likely ease back to the Bank of Canada’s two per cent target over the longer term, the report added.

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