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Santa Clara University Prof. Mario Belotti Presents Optimistic Economic Forecast
Thursday, Feb. 20, 2014
SANTA CLARA, Calif., Feb. 20, 2014— Santa Clara University’s esteemed professor of economics, Mario Belotti, shared his annual economic forecast Feb. 20 at Santa Clara University before a roomful of alumni, business leaders and others with whom he has shared his annual address for about 40 years.
Last year, Prof. Belotti correctly projected that inflation and interest rates would stay low while unemployment continued to tick downward. This year he projected:
*Gross Domestic Product, or GDP, should grow by about 3 to 3.2 percent for the year, about a half percentage point better than 2013’s growth rate.
*Inflation will be about 2 to 2.2 percent for the year, compared with 1.7 percent in 2013.
*Interest rates on 10-year bonds will tick up to about 3 or 3.2 percent, from about 2.75 percent now.
*Consumer spending should grow by about 2.5 to 2.7 percentage points, about the same as the prior year, as consumer wealth, confidence and debt levels continue to improve. All of the wealth that was lost during the Great Recession has been recovered, Prof. Belotti noted, though distribution has skewed in favor of the wealthiest.
*The stock market, for which he does not give specific forecasts, is nonetheless projected to perform less well in 2014 as it did in 2013, as it digests last year’s 30 percent gain.
*Business spending should increase by about 6 or 7 percent over last year, when such spending was constrained by fears of ObamaCare, sequestration and other concerns that have largely been worked out.
He said he will also be watchful for the impact of the decline in spending by lower-income consumers, and he is not expecting the new Federal Reserve Chair Janet Yellen to enact major changes in policy from her predecessor.