The World Affairs Council of Charlotte hosted Jay Bryson, Well Fargo’s global economist on February 23 as part of the 2013 Business Breakfast Series.
With the U.S. still recovering from an economic crisis, a current unemployment rate of 7.9 percent, and a weakening global economy there is much ambiguity in the future of the world’s economic stability. Bryson projects a realistically grounded and relatively reassuring economic forecast for 2013.
PowerPoint SlideShow: Global Economic Outlook 2013
In an era of fiscal constraint, Bryson predicts that the U. S. gross domestic product GDP faces a slow and steady growth with moderate accrual in exports and a gradual gain in imports. There is still significant uncertainty about the federal budget deficit, as well as the willingness of businesses and households to commit to major capital purchases. Small businesses are hesitant to commit to capital expenditures due to concerns as to how erratic tax and policy changes may affect sales and operating expenses.
Throughout the economic recovery, the individual’s real disposable income has been restricted and will continue to face constraints following more tax surges in 2013. Consumer confidence has been bruised yet improvements in the stock market have supported consumer spending despite real incomes remaining the same.
Bryson predicts that the global GDP will be average as long as there are no major imbalances in the world economies. In recent years, China has had an advantage in the business sector. Although China’s economy has been on the rise, they are not an overly leveraged economy. It is suggested that China’s economic growth will continue to strengthen somewhat however not as efficiently as it has in the last decade. Growth in the Euro zone is projected to stay weak due to its recent recession. It is anticipated that over the next few years Europe will face a significant fiscal pressure. There is a correlation between the fiscal pinch and GDP growth. Currently weak growth has hindered improvements in government deficits. Favorably, in recent years, economies of highly indebted countries such as Germany, Greece, Ireland, Italy and Spain are in much less of a bind than they were in 2007.
Overall, Bryson concludes that there are some struggles that lay ahead. However, inevitably over time economies will stabilize. Unfortunately, some will brave a longer recovery than others.
Summarized by Rebecca Mozafaripour, International PR Major, UNC Charlotte