Texas to See 'Modest' Impact from Asian Crisis

by Alan Hunt

The bottom line impact of the Asian economic crisis on the Texas economy will be "relatively modest," predicted Dr. Lori Taylor, senior economist and policy adviser at the Federal Reserve Bank of Dallas, speaking in Waco Thursday.
Taylor told her audience at the 1999 Economic Forecast Conference, sponsored by Baylor's Hankamer School of Business and the Waco Chamber of Commerce, that the crisis will trim the state's economic growth rate, "but we will continue to grow next year."
However, the growth rate will be on the order of one and a half to two and a half percent rather than the three to four percent of the previous year. But she pointed out, "We will not be in recession in Texas in 1999."
Taylor added, "The one really big factor is what the Asian crisis does to Mexico." A slowdown in the Mexican economy could pose a problem because of that country's importance as a major market for goods produced in the Lone Star State, she warned. "Texas exports considerably more to Mexico than it does to Asia."
Much could hinge on the effects of the crisis on oil prices, Taylor said, because lower oil prices hurt not only the Texas economy but also the Mexican economy.
Other speakers at the conference included Baylor economics professor Dr. Steve Green, Dr. Tom Kelly, director of the Center for Business and Economic Research at Baylor, and Dr. Bill Reichenstein, who holds the Pat and Thomas R. Powers Chair in Investment Management at Baylor.