The economic outlook was bleak at the UCLA Anderson School of Management’s first Forecast for 2009.
The report showed a 6.1 percent decline in real gross domestic product in the last quarter of 2008 and forecasted an even steeper decline of 6.8 percent in the first quarter of 2009.
Anderson economists also predicted the California economy will remain in a downward spiral for the near future, with no clear recovery in sight, according to a UCLA statement detailing the Forecast.
The nation’s financial growth was forecasted to be dependent on the international economy, linking the current recession to declining international economic conditions.
According to the report, action by the United States government alone will not be enough to restore growth in the economy. A recovery in world trade will play a leading role in reversing our own economic outlook.
Recent stimulus packages that have been planned and passed in Europe, China and Japan will prove to be helpful in international economic recovery, said David Shulman, a UCLA Anderson Forecast senior economist.
One other important factor in the nations economic recovery will be the world banks assurance that when loans are given out, the money is there, said Jerry Nickelsburg, another UCLA Anderson Forecast senior economist.
Nickelsburg said it is vital that the banks are not loaning money they do not have.
He said continued talks regarding economic solutions will help.
“The last important factor in the recovery of our economy is the upcoming G-20 meeting in London in April, which discusses the economic issues of industrialized countries,” Nickelsburg added.
The UCLA Anderson Forecast also predicts that the nation will hit its peak unemployment rate in mid-2010, with over 10 percent of the population without jobs. By 2011, the rate is predicted to decrease, but will still be above 9 percent.
The nation is in the downward phase of a recession similar to California, Nickelsburg said. The recession in the state is forecasted to continue through the middle of this year, but by the end of 2009 it should start stabilizing, he added.
California’s economy is expected to pick up in 2010 with some slow growth, and by the end of the year the state could be seeing some normal growth numbers, Nickelsburg said.
“The California economy will begin to pick up, and 2011 should be a decent year,” he added.