Higher Oil Prices Lift Purchasing Power in Canada for Some
Dow Jones
Yesterday
1024 ET - Elevated oil prices boosted Canada's purchasing power but the gains are uneven across the country, Royal Bank of Canada says. Real gross domestic income expanded 3.1% on-year in 2Q, nearly triple the pace of real GDP growth after a 46% surge in oil added about C$12 billion a quarter to export revenue. Royal Bank says oil producers and resource-rich provinces are capturing a disproportionate share of the initial windfall, while most households face higher costs without offsetting income gains. This complicates monetary policy, since the Bank of Canada controls only one interest rate for the entire country, Royal Bank adds.
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