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S.C. economy to be in spotlight
Experts to give their forecasts at annual Economic Outlook Conference
Will 2008 bring a continued economic expansion or a recession?
Economists from the Moore School of Business at the University of South Carolina will read their tea leaves next month at the school’s annual Economic Outlook Conference.
Paulo Guimaraes, a research economist for the Moore School, will give the state economic forecast. Guimaraes replaces research economist Don Schunk, who had given the forecast for the past eight years. Schunk left USC for Coastal Carolina University early this year to join the BB&T Center for Economic and Community Development.
Guimaraes is a clinical associate professor at the division of research in the Moore School. He earned his doctorate in economics at USC in 1992.
Doug Woodward, professor of economics and director of the division of research, will give the broader economic forecast “from global to local,” which will include economic indicators for South Carolina, the United States and the world.
Last week’s report that the U.S. economy grew at a brisk 3.9 percent, the fastest pace in 1½ years, is dispelling at least some talk of a national recession.
The third quarter’s growth rate was up, if by just a bit, from the 3.8 percent of the second quarter. But it was the strongest showing since the first quarter of last year.
The increase in gross domestic product, the value of all goods and services produced within the United States, exceeded analysts’ forecasts for a 3.1 percent growth rate. Gross domestic product is considered the best barometer of the country’s economic fitness.
A group of economists from around the state told the state Board of Economic Advisors last week that S.C. should not expect a protracted slowdown or any massive layoffs.
That prediction came after state economists in October predicted that a recession for South Carolina could begin as early as next year.
The BEA predicted last month that South Carolina could face a $430 million deficit next year. Things haven’t improved much since that meeting.
“We’ve had five consecutive months of 1 (percent) or 2 percent growth, William Gillespie, the state’s chief economist told the board last week. “We’re not doing well right now.”
Any deficit means the state could have difficulty paying the costs of K-12 education among other things.
Last year, the Legislature shifted the burden of paying for schools away from property taxes paid by homeowners and onto the state sales tax.
Some critics warned lawmakers about substituting the volatility of sales tax collections for the more stable property tax revenue.
There have been repeated calls for comprehensive tax reform, but little to no headway has been made on the issue.
The outlook conference will tackle that issue when William Fox, director of the Center of Business and Economic Research delivers the keynote address: “Sound Tax Policy for a Competitive Economy.”
Fox is the William B. Stokely Distinguished Professor of Business and director of the Center for Business and Economic Research at the University of Tennessee.
He has served as a consultant on finance, taxation and economic development in a number of states and developing countries. He is a member of the American Economics Associations and past president of the National Tax Association.