Despite Foreclosures Atlanta’s Economy Is Expected To Shine

Posted in Foreclosures, July 11th, 2008 |

Economist Brian Beaulieu, of Trend Research, is of the opinion that despite foreclosures the economy of Atlanta is expected to shine during the forthcoming years as compared to other parts of the nation. This prediction has taken into account that 2009 will see recession in the country.

Beaulieu thinks that the economy of US will slightly improve from the second half of the current year in comparison to the first six months. At the moment the country is not in recession, although it is being badly mauled by foreclosures, but during the years from 2009-20010 recession seems to be inevitable. He was talking at the annual meeting of Rockbridge Commercial Bank, Atlanta. The current year is preparing the ground for the recession – “the warm-up”. It will peak in 2010 and then start tapering off from the beginning of 2011 allowing for gradual recovery.

Georgia has recently been bettering its performance compared to the national economy as well as the southeast although foreclosures continue to rage and fume. The gross state product of Georgia was improved upon that of the entire southeaster region as well as USA. The interest rates of Georgian are better than the national median.

This trend will continue despite the foreclosure tsunami gripping the entire nation. The impact of the sub-prime foreclosure crisis is not so strong as it was initially. A lot of the shock has been absorbed. However other debt problems are looming large. Inflation is increasing, price of energy and fuel is spiraling while the housing market continues to slow down with the onrush of foreclosed houses. This combination will be pushing the country towards recession. It will hold sway till 2010 and then a long period of slow growth will begin from 2011.

The current year will appear comparatively flat. The recession from 2009 to 2010 will take on the complexion of the early 80’s. During that latter period fuel price, interest rates and unemployment numbers had increased. Another prediction is that if Democrats conquer White House taxes will rise and further hasten the economic slump.

The main factor however that is dragging down the economy is the foreclosure numbers that is telling on the real estate negatively. The building permits in Georgia have fallen to record low levels from the early part of the 1990-decade. Since the Civil War there has not been such a percentage decline in the housing market.