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Indiana Economist Predicts Modest National Growth

A Ball State University economic forecast predicts the national economy will grow by about 2 percent next year.  But that growth won’t be enough to cover the anticipated debt a national tax reform effort will bring.

Ball State economist Michael Hicks forecasts the U.S. economy will grow by 2.2 percent in 2018. He says that while that isn't a recession, it's much slower growth than the post-World War II years and the 1980's, the last time a federal tax reform was passed.

While the Senate and House work out the details of a new tax reform, Hicks says that effort will benefit Indiana corporations  modestly.

“Here in Indiana, about 100-120 million dollar impact.  That’s welcome, but we’re in about a 320 billion-dollar economy.  So it’s welcome, but not earth-changing," says Hicks. 

Congress’s Joint Committee on Taxation estimates the reform plan will add $1 trillion in new national debt, but the Trump administration says economic growth will make up for that.  

Hicks says he doesn’t see it.

“Part of it, yes – $00-300 billion, but not $1 trillion, no.  I don’t think there’s any evidence that this tax reform or any other one, given our current tax rates, would generate that sort of effect.”

The annual forecast predicts the sectors that will grow the most in 2018 include healthcare, business services, finance, and transportation and logistics – the last which is a major portion of Indiana’s economy.

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