Statistics Canada said Thursday that the economy grew by 0.1 per cent in July, outperforming its preliminary estimate that pointed to a contraction of 0.1 per cent.
The heads of Canada's biggest banks say rising interest rates are starting to have their intended effect of slowing demand but that they continue to notch growth.
Inflation appears to have peaked, but it's still running hot, and a supersized rate hike from the Bank of Canada next week is widely expected.
The Canadian economy stayed flat in May, with real gross domestic product showing neither growth nor contraction after a 0.3 per cent expansion in April.
The increase in the consumer price index for the month was largely due to gasoline prices, which shot up by more than 50 per cent from with a year ago.
As Canadians face a double whammy of skyrocketing inflation and the largest interest rate hike seen in 24 years, one expert is warning that prices won't be coming down anytime soon.
The Bank of Canada signaled a more aggressive approach to bringing skyrocketing inflation back under control as it announced the largest single rate increase since August 1998.
That marks the lowest rate in at least two decades and comes even as the local economy's job-creation engine stalled last month.
Central bank says businesses' expectations for near-term inflation have increased, and firms expect inflation to be high for longer than they did in the previous survey.
The combination of a fiercely competitive job market and the still-rising cost of living will likely lead to more companies boosting employee pay this year, experts say.