The Canadian economy remained stable in August, and preliminary estimates indicate a decline in the third quarter of the year, according to a report released Tuesday by Statistics Canada.

The federal agency's report noted that rising interest rates, inflation, wildfires, and drought continue to affect the Canadian economy.

August is the second consecutive month in which the Canadian gross domestic product remained stable, and preliminary estimates suggest that the economy maintained this trend in September.

As for the third quarter, preliminary estimates from Statistics Canada indicate that the economy contracted at an annual rate of 0.1%. The Canadian economy had recorded a contraction in the second quarter.

The agency indicates that 8 out of the 20 industries covered in its report recorded growth in August.

Growth was also recorded in service-producing sectors, while there was a decline in goods-producing sectors.

Industries that experienced growth include wholesale trade, mining, quarrying, and oil and gas extraction.

Sectors such as agriculture, forestry, manufacturing, retail trade, and accommodation and food services witnessed decreases.

High interest rates are also expected to continue to curb economic growth, especially as more households prepare to renew mortgage loans at higher interest rates than before.

According to recent forecasts from the Bank of Canada (the central bank), economic growth will remain weak for the rest of this year and for a large part of next year.

The Bank of Canada's key interest rate is currently 5%, the highest level since April 2001.

A decline in spending caused by higher borrowing costs is also expected to help curb high inflation, whose annual rate fell from 4% in August to 3.8% in September.

The Bank of Canada expects the annual inflation rate to return to 2%, the bank’s target, in 2025.