Esteemed Santa Clara University Professor of Economics, Mario Belotti, Shares Upbeat Economic Forecast
Professor's Autobiography Recently Published
SANTA CLARA, Calif., Jan. 20, 2015 — Santa Clara University’s esteemed Mario Belotti, the W.M. Keck Foundation Professor of Economics, shared his largely upbeat annual economic forecast Jan. 20, before a roomful of Bay Area business leaders, bankers, and students, some of whom Dr. Belotti has advised for decades.
Dr. Belotti’s forecast, which he has been sharing nearly every year since 1970, coincided with the recent publication of his autobiography, It Was All for the Love of a Horse: A Life Story, recounting his life and history as the son of a sharecropper in Italy through his 55-year tenure at Santa Clara University.
At the event Tuesday, Dr. Belotti predicted that the U.S. economy will continue to grow, at a pace of 3.2% to 3.3% for 2015. That predicted GDP growth rate, which is lower than in recent quarters, was held back by problems in international economies and the 12-year high in the value of the dollar, which makes exports more expensive and imports cheaper.
Dr. Belotti suggested that growth in the GDP will come from:
• Increases in consumer spending of about 2.8%, made possible by:
>a projected increase in available jobs of 1.8 million this year, after growing 2.9 million last year.
>household wealth increase of 2% to 3%
>consumers who have been paying down their debt -- by $1 trillion since the beginning of the recession.
>debt relative to disposable income at the lowest level in about 10 years, now lower than that of Japan, Germany and Canada.
>continued low inflation
>continued low interest rates
• Increased business spending on goods and services, about 9% to 10% growth which adds about 1 percentage point to GDP growth. Factors behind business spending include stock market increases; companies that have accumulated a lot of cash; improved corporate balance sheets; and cost of capital that is the lowest in more than 55 years
• Government spending increases of 3% to 4% , led by states and local governments, not the federal government
• GDP growth will be hampered by expected increases in imports over exports, knocking about 0.3 percentage points off GDP growth
Dr. Belotti also predicted that interest rates will stay low for the majority of the year, as the Federal Reserve said it will be "patient" with interest rate increases, and that inflation could be a bit higher this year than last, perhaps close to 2 percent. Oil prices will probably not fall below $40 a barrel, he said, but rather will level off at about $50 a barrel, keeping gasoline prices low for the year.
Deborah Lohse | SCU Media Relations | firstname.lastname@example.org | 408-554-5121