Tags: Grantham | GDP | 1.4% | 2030

Jeremy Grantham: GDP Growth Will Slumber Around 1.4% Through 2030

By    |   Wednesday, 21 November 2012 09:35 AM EST

The trend gross domestic product (GDP) growth rate of 3 percent a year that has prevailed for the last century is a thing of the past, says Jeremy Grantham, chief investment strategist at money manager GMO.

So what’s going to set us back to such a mediocre rate?

“Population growth that peaked in the U.S. at over 1.5 percent a year in the 1970s will bob along at less than 0.5 percent,” he writes in his quarterly commentary.

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

“Growth in service productivity is low and declining.” Total productivity growth will be just 1.3 percent through 2030, Grantham says.

Resource costs will rise, he predicts. "If resources increase their costs at 9 percent a year, the U.S. will reach a point where all of the growth generated by the economy is used up in simply obtaining enough resources to run the system."

Grantham isn’t too impressed with Federal Reserve Chairman Ben Bernanke.

“Investors should be wary of a Fed whose policy is premised on the idea that 3 percent growth for the U.S. is normal,” he writes. “Remember, it is led by a guy who couldn’t see a 1-in-1,200-year housing bubble!”

Not everyone shares Grantham’s pessimism, especially when it comes to the short term.

Dean Maki, chief U.S. economist for Barclays, forecasts that third-quarter GDP will be revised upward to 2.9 percent from 2 percent initially, Bloomberg reports. And he sees 2.5 percent growth in the fourth quarter.

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

© 2025 Newsmax Finance. All rights reserved.


StreetTalk
The trend gross domestic product (GDP) growth rate of 3 percent a year that has prevailed for the last century is a thing of the past, says Jeremy Grantham, chief investment strategist at money manager GMO.
Grantham,GDP,1.4%,2030
267
2012-35-21
Wednesday, 21 November 2012 09:35 AM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
Newsmax2 Live
 
On Now:10:30p ET • The Trump Wars
Coming Up:11:00p ET • Ed Henry The Briefing
Get Newsmax Text Alerts

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© 2025 Newsmax Media, Inc.
All Rights Reserved
NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved