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Nov 8 (Reuters) - Below are key quotes from an appearance by Bank of Canada Governor Mark Carney on Thursday in Montreal:
"We have a fairly modest outlook for the growth of disposable income. We don't disclose it. We don't have a sharp increase in the growth of disposable income and you see some of that in our implied consumption forecasts, or forecasts for household consumption, which is growing roughly at 2 percent over the forecast horizon. So modest growth in consumption."
"I wouldn't say we would think that there's a lot of downside risk to the income side since it's relatively modest. So the risk, if I follow your question, I think your risk is, could ... the debt ratio not stabilize and continue to go up and why would that happen? So in our forecast, the reason it would (be) less likely (to) happen is because borrowing continues, including home equity extraction and financing of renovations or other things."
"On the housing starts, they're slower than they were but they're still running above demographic demand, or household formation to be more precise."
"We still see, as we highlighted in the MPR (Monetary Policy Report), that housing starts, particularly multiples, condos, are well above historic averages, even adjusting for population. And I remind you that in our forecast we're expecting this decreased contribution from housing relative to GDP ... and in fact drag from the housing sector on growth from now and so we're starting to see some things that are consistent with that, so it's entirely consistent with expectations ... it's very unlikely that you're going to have a sector that's going to grow faster than GDP forever or else it's going to occupy all of GDP."
"This situation in the United States is serious ... it is clear that a rapid fall in American growth would cause problems for the Canadian economy. But as the minister of finance underlined yesterday, the government of Canada has options, and of course the Bank of Canada has options too. And as far as the Bank is concerned, we could react quickly in case a difficult situation arose in the United States."
(Carney was asked whether the fiscal cliff was the biggest current threat to the Canadian economy)
"At this moment, yes ... because it poses a big risk and it's a risk that is almost immediate."
"If the U.S. were to persistently go over the fiscal cliff ... that could well have implication for policy here in Canada. But the good news is that Canadian authorities have flexibility."
"We have a relatively weak forecast for the third quarter - 1 percent - and data is broadly in line with that. There are some timing issues that drive some of the output in the energy sector, which will shift some growth between the third and the fourth quarter. That still seems to be in line. But I wouldn't over interpret recent data and I certainly wouldn't draw any connection to our monetary stance."