Newspaper article THE JOURNAL RECORD

Economic Outlook: End of `Nice Run'

Newspaper article THE JOURNAL RECORD

Economic Outlook: End of `Nice Run'

Article excerpt

Thomas Davis prescribed some preventive medicine before delivering his diagnosis at Tuesday's Economic Outlook Conference.

"Did you bring your Prozac? Because this is not going to be good."

As the chief economist for Motorola, Davis looks for a 1.5 percent increase next year in the national gross domestic product, down considerably from this year's expected growth of 3.3 percent, and even farther below a "pretty nice ride" since 1996.

"We've really outperformed expectations for three or four of the last few years," Davis said. "But that was a nice run, and I'm telling you, it's over."

Davis, a former senior economist with General Motors, was the opening speaker at the conference sponsored by the Greater Oklahoma City Chamber of Commerce held at the Northwest Expressway Marriott.

Asia's economic turbulence, creating a 7 percent differential since 1996, will shake up the U.S. economy in the coming months, Davis predicts. Japan -- plummeting by three percentage points this year -- will deal the sharpest jolt.

"Asia needs a strong Japan to climb out of the hole they're in," he stated.

The hard times felt in Asian countries will reverberate to the United States in terms of exports to those countries. "Places like Los Angeles are going to be in deep," he warned. "Ships are loaded coming in, but they're going out empty."

China will slow rapidly, he predicted, from a 10 percent increase down to 5 percent. While even 5 percent seems strong, such a backslide "just doesn't feel good," Davis said. He also foresees social disruption in China of a proportion that the "world is not going to like."

Recovery for Asian countries will be sluggish, Davis said. He doesn't look for a turnaround in Indonesia, for example, until 2002. Japan, too, could take four years to mend. However, South Korea may prove a valuable role model for the Asian block.

"South Korea is one of the few countries in Asia that's really trying to reform in the Western way. …

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