Canada's economy has grown at a slower than expected two percent annual rate.

Analysts had been expecting the economy to grow 2.5 percent. The U.S. economy grew by a 1.6 percent annual rate in the second quarter.

The figure is a sharp drop from the 5.8 percent annual growth Canada saw in the first quarter. Statistics Canada on Tuesday revised downward the first quarter figure from 6.1 percent reported initially.

Canada's central bank had predicted three percent growth in the second quarter. The worst than expected growth could mean the bank leaves interest rates unchanged next week.

Canada is the only Group of Seven nation to raise interest rates this year, raising rates in June and July.