Bank of Canada sees oil shaving a bigger slice from GDP

SANTIAGO, Dec 6 (Reuters): The slide in oil prices will probably cut Canadian economic growth by 1/3 of a per centage point in 2015, not the 1/4 point the Bank of Canada estimated in late October, bank Governor Stephen Poloz told Reuters on Friday.

He was speaking on the sidelines of an International Monetary Fund forum in Santiago two days after he held the central bank's policy rate steady at 1 per cent. In the interest rate decision, he pointed to the stimulative impact of US economic strength but also to the chilling effect on Canada, a major oil exporter, of cheaper crude.

"When we're predicting growth somewhere between 2 and 2.5 per cent, 0.3 (the per centage point reduction from oil) or thereabouts is an important factor. That's downside risk," Poloz said in Santiago. On Oct. 29, he had estimated the effect of the lower oil price on economic growth to be a quarter point, but prices have continued to slide since then.