From TD Economics

• Global growth has stood up to trade turmoil better than many feared earlier this year. Even with momentum expected to slow in 2026, it will be to a lesser extent than we expected three months ago.
• In contrast, the U.S. economy is forecast to gain a step as Fed rate cuts, the One Big Beautiful Bill Act (OBBBA) and regulatory changes provide a tailwind.
• Canada is also an economy of contrasts. Government initiatives to boost investment are likely to meet some resistance with 2026’s CUSMA review. The Bank of Canada has done its part, with government spending set to play an increasing role.

As the world turns the page on 2025, key global growth players are on track to meet or exceed our forecasts from earlier this year, despite the disruption from U.S. trade policy. For a variety of reasons tariffs have not proven as punitive compared to the announced tariff rates, and interest rate cuts by global central banks provided a needed tailwind (see report). Looking ahead, the same story will unfold, but a further downshift is likely as most major central banks have reached the end of rate-cutting cycles and must now ensure balanced policy against stable inflation. And while government deficits are expanding in many economies, this is not a universal theme. Some face pressures to consolidate, minimizing the global fiscal impulse next year.

China was among the forecast outperformers, albeit investment is now weakening. This most recent bump in the road will firm the resolve of authorities to prop up the economy through policy support next year. Meanwhile, governments in the eurozone are expected to ramp up spending, particularly on defense. However, it will take time for major countries to follow through on their announcements, with that fiscal impulse becoming more evident in the second half of 2026.

https://economics.td.com/ca-quarterly-economic-forecast