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These are stories Report on Business is following Tuesday, Dec. 2, 2014.

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Troubled countries
The 'most mismanaged' oil economies are in deep trouble amid the plunge in oil prices.

The question now is: How much worse will it get?

A new report today from Capital Economics notes how the Russian ruble, Venezuela's bolivar and Nigeria's naira have already plunged this year.

To the tune of 34 per cent, 61 per cent per cent and 13 per cent, respectively, against the U.S. dollar, senior economist Andrew Kennigham wrote.

"Admittedly, the most mismanaged oil economies are already in big trouble," he said.

"In all three countries, lower government and private sector spending will reduce demand and GDP growth," Mr. Kenningham added.

Indeed, Russia's economy ministry warned today of a recession next year.

And as Bank of Nova Scotia's Camilla Sutton noted recently, the Fitch ratings agency has already cited Venezuela, Russia and Ecuador as countries with "fiscal breakeven" oil prices of at least $100. And countries, again including Venezuela and Russia, along with Nigeria and Angola, that are dependent on oil revenues.

"Accordingly for some of the more vulnerable countries, there could be a ratings impact," Scotiabank's chief currency strategist said.

Mr. Kenningham's report, by the way, was about the winners and losers in the oil slump, and how there are more of the former than the latter.

"The latest slump in the oil price has wreaked havoc on some emerging economies and has taken a toll on the share prices of energy firms," he said.

"Nonetheless, cheaper oil is still a net positive for global GDP because of the much larger boost it will give to oil consumers."

Where Russia, Venezuela and Nigeria are concerned, he noted that the "knock-on effects" across the globe will be muted because, as a group, they represent less than 4 per cent of the world economy.

Other emerging nations, such as China, India and Turkey, will be beneficiaries of the slide in oil prices, Mr. Kenningham said.

In Russia, the ruble sank again today as a recession looms.

Hit by Western sanctions and the drop in oil, Russia now expects its economy could shrink by 0.8 per cent next year, according to the economy ministry.

Its earlier projections had pegged economic growth at more than 1 per cent.

"This is, clearly, hitting Russia's economy," senior BMO economist Jennifer Lee of the oil price plunge.

"Deputy Economy Minister Vedev warned of the possibility of the first recession in six years and that real GDP may fall 0.8 per cent in 2015. Market watchers are waiting for PM Putin's annual speech to the Federal Council on December 4 to gauge where he stands."

Gas pains ease
Paying $1.129 a litre may still seem steep, but don't underestimate the power of the pump.

Canadians are enjoying the lowest gas prices in years, which is projected to boost consumer spending and help juice the economy.

"Faster income growth and lower gasoline prices bode well for household spending prospects this holiday season," said David Madani of Capital Economics in Toronto.

"Given the extent of the drop in refinery oil input costs, gasoline should drop further in December," Mr. Madani, who tracks the Canadian economy for the group, said in a report.

"Since household demand for gasoline in the short term is fairly price inelastic, lower prices mean that most households will have more disposable income left over for spending on other goods and services."

Average pump prices in Canada fell to $1.18 in November, according to Mr. Madani.

Of course, prices vary across the country and, the Canadian Automobile Association noted today, have tumbled by as much as a nickel a litre in some cities in the past week alone.

Average prices, the CAA said, now stand at a four-year low.

Mr. Madani's not alone in his projections.

Researchers around the world say the plunge in oil prices since the summer, while not a good sign for Canada's oil patch, will nonetheless help jolt the global economy at a time when that's badly needed, as lower energy costs filter through.

Just as an example, one economist quoted by The Wall Street Journal calculates that easing pump prices in the past half-year is equivalent to a $75-billion (U.S.) tax cut for Americans.

And one of Mr. Madani's colleagues, Julian Jessop of Capital Economics in London, says the plunge in oil since June "represents a transfer of annual income of around $1.3-trillion from oil producers to oil consumers."

In Canada, of course, it's very much a tale of two economies.

While lower energy costs, coupled with a weaker currency that moves with the price of oil, will help businesses in central Canada, they spell trouble for the oil patch and energy-producing provinces.

Still, Canadian consumers are going to help drive this economy.

"If households maintain their close to record-low saving rate of 3.9 per cent, then consumption would grow by 4 per cent annualized," Mr. Madani said of the current fourth quarter of the year.

"Allowing for some increase in the saving rate towards its four-quarter moving average of 4.4 per cent, we anticipate consumption growth of 3 per cent."

The CAA believes pump prices will continue to ease from yesterday's Canadian average of $1.11 a litre. (Across the street from my office, it sat this morning at $1.129.)

"For many Canadians this week, the gas pump will be putting the smallest dent in their wallets in the last four years," said CAA spokesman Jeff Walker.

"The sharp drop in prices of crude oil over the past couple of months is finally being reflected in Canadian retail prices."

… and what that also means
The drop in oil prices is changing fortunes across Canada.

BMO Nesbitt Burns, for example, now believes that Alberta, the recent engine of the country's economy, is suddenly on the slower track, while central Canada will be the winner from lower energy costs.

"We've revised down our Alberta outlook in recent weeks alongside the slide in oil prices, leaving real GDP on pace to merely match the rest of Canada in 2015," said BMO senior economist Robert Kavcic.

And that, he said, is going to play out in more ways than one.

"Notably, this will likely slow the rate of inward migration to the province, especially given that fundamentals in many other provinces are improving (think weaker C$ and sturdy U.S. demand)," Mr. Kavcic said.

"If history is any guide, migration flows to Alberta could be cut in half in the year or two ahead," he added.

"That said, the level should remain positive given still-higher was, a lower jobless rate and a lower tax burden."

His comments came as yesterday's rally in oil prices fizzled, and the Canadian dollar softened.

As Mr. Kavcic noted, manufacturing-driven provinces like Ontario and Quebec won't benefit just from lower energy costs, but also from the boost to exports.

The Canadian dollar touched a low point of 87.58 cents today, and a high of 88.34 cents, and was sitting at 87.74 cents by late morning.

BMO boosts dividend
Bank of Montreal gave its shareholders a little gift today, even as its fourth-quarter profit missed what analysts were projecting.

As The Globe and Mail's Tim Kiladze reports, BMO hiked its quarterly dividend by 2 cents to 80 cents.

Fourth-quarter profit was essentially flat, at $1.07-billion or $1.56 a share.

Adjusted, earnings per share came in at $1.63, or about a nickel short of the estimates.

BMO was the first of Canada's major banks to kick off the fourth-quarter earnings season.

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