Gloom about low oil prices overblown: BMO CEO

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Canada's Oil Patch
Pumpjacks at work pumping crude oil near Halkirk, Alta., June 20, 2007. The Conference Board of Canada says oil and gas producers are expected to dive into the red this year, but begin crawling back to profitability in 2016 as cost-cutting efforts bear fruit.

TORONTO – The CEO of the Bank of Montreal says doom-and-gloom talk about the effects of the oil price shock on the Canadian economy is overblown.

Bill Downe says he expects the economy to grow by about two per cent this year, in spite of the fact that the prolonged decline in the price of crude has had a “significant negative impact” on employment and consumer spending in certain regions.

That forecast contrasts with the Bank of Canada’s prediction of 1.4 per cent economic growth this year, though that did not take into account new spending in the federal budget released last month.

The central bank is expected to update its projection when it releases its new monetary policy report on April 13.

Downe made his comments today during the bank’s annual meeting in Toronto.