ATLANTA – Georgia’s economy will build on its strength from last year to expand by a healthy 2.5 percent this year and 2.0 in 2016, according to a quarterly forecast released Wednesday by Georgia State University.
Fueling growth for Georgia and the nation is the 50-percent drop in the price of petroleum in the last six months. That will free up money for consumers and businesses to spend elsewhere, according to Rajeev Dhawan, director of the university’s Economic Forecasting Center.
“People are rational economic agents,” he said. “They will splurge some on discretionary spending (eating out, for example), but otherwise will hoard and channel the savings towards a down payment on a home or other big-ticket items, like cars.”
That has also boosted some sectors important to the Georgia economy.
“Strong consumer confidence, buoyed in part by continuing job growth and a resurgent stock market, has reflated consumers’ wealth position and their ability to spend, which is in turn good news for our hospitality, transportation, government coffers, trade sector, and the area’s real estate and construction sector,” he said.
Cheaper energy will also boost the state’s manufacturing sector which could lead to added hiring.
However, the oil-price drop is stalling gas and oil development, which impacts some Georgia companies that supply that industry. Also weakness in China and Europe are depressing exports, which is a negative for some Georgia businesses.
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