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Higher gas prices could cause wider economic slowdown, economist says

Financial Post, Canada -- Gasoline prices, already near record highs of $1.40 per litre this week, could rise further if Middle East tensions escalate, further dampening the economic outlook.

“Especially if the situation in the Middle East were to worsen, we could see $1.60 per litre,” said Sal Guatieri, vice-president and senior economist at Bank of Montreal. “Under that scenario our economy would slow meaningfully and our unemployment rate would go up.”

Oil prices are expected to remain relatively steady at about US$100 per barrel for the next year, which Mr. Guatieri said would either stabilize gas prices or even cause them to decline a little. However, he cautioned there was a “not insignificant” risk of the cost jumping another 25% (a 30% cumulative increase from last year) if tensions .....


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Submitted Apr 06, 2012 By: Gas User
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bandannaman
Champion Author New Jersey

Posts:1,849
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Message Posted: Apr 6, 2012 8:10:01 PM

Is that US dollars or Canadian dollars?
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TomT2Lee
Champion Author Cincinnati

Posts:6,474
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Message Posted: Apr 6, 2012 7:52:12 PM

and higher prices could lead to the Federal Reserve printing more money. Oh, wait, they already have been doing that, which has devalued the dollar and led to higher commodity prices. Don't worry people. Relax. The professional politicians are looking out for number one!
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