Economist at Wescon Forecasts Sunshine for Electronics Industry
 
Copyright (c) 1989, McGraw-Hill, Inc.
SAN FRANCISCO (Microbytes Daily News Service) --- In spite of an
economic slowdown in 1990, the outlook for the electronics
industry looks very promising, according to economist Mario
Belotti of the University of Santa Clara. Speaking to electronics
engineers and managers at Wescon here Tuesday, Belotti, who
specializes in economic forecasting, emphasized that while
business investment spending will decline next year, much of the
remaining investment will be for modernization. That
modernization trend will be good for the electronics and
telecommunications industries, he said.
 
Belotti dismissed predictions of an impending recession, claiming
we'll see lower inflation, a drop in interest rates next year,
and stabilization of the dollar. However, Belotti warned that the
US trade deficit will be about $90 billion at the end of 1990,
with most of the imbalance still directly attributable to strong
sales of Japanese goods in the U.S. The trade deficit was $171
billion in 1987, and, according to Belotti's estimates, will be
cut by almost half by the end of 1990.
 
Japan's economy will remain strong but start to slow down, he
said. The greatest growth in the 1990s will be in Latin America,
he said, predicting that the enormous debt those countries have
will "not be a problem ten years from now" and will either be
written off or turned into equity and bonds.
 
Belotti also predicted that global competition will increase
dramatically in the '90s, with the emergence of new high-tech
industrial centers in Malaysia, Thailand, the Philippines, and
Indonesia.
 
But Belotti said he is very encouraged by the reported changes
taking place in Eastern Europe and the Soviet Union. Not only
will these developments help western economies in general by
opening new markets, they could specifically help the US by
allowing it to reduce military spending and redirect part of
those expenditures into the private sector and into improved
social programs.
 
                              --- Nick Baran
 
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