January 13, 2015 / 8:08 PM / 3 years ago

Bank of Canada's Lane: no 'drastic' effect on GDP growth from low oil

MADISON, Wisconsin, Jan 13 (Reuters) - The Bank of Canada does not see a “drastic” effect on the country’s economic growth from the slump in oil prices, the central bank’s Deputy Governor Timothy Lane said on Tuesday.

In response to a question on whether the central bank was still likely to anticipate significant growth in the coming year notwithstanding the drop in oil prices, Lane said, “Yes, that’s probably fair.”

He also noted the estimate Bank of Canada Governor Stephen Poloz gave last month that the decline in oil could take about a third of a percentage point off of economic growth this year.

“Of course we’ve now done a more thorough analysis that takes more account of both the fact that prices have moved further, but also that we can model the countervailing effects a bit more,” said Lane.

“We’re not thinking of something that’s drastic,” he added. The Bank of Canada will release its Monetary Policy Report next week. (Reporting by Brendan O’Brien, writing by Randall Palmer and Leah Schnurr; Editing by Alan Crosby)

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