Economists expect Kentucky to see some growth in 2020 followed by a recession in the coming years.
The Consensus Forecasting Group met Tuesday to discuss what numbers the state should be budgeting on over the next three years based on economic expectations.
Presented with pessimistic, optimistic, and control options, the group chose to move forward with a combination of predictions for the coming years.
For 2020, the group chose the most optimistic of the estimates which expects growth in some areas, low unemployment numbers, higher incomes and low inflation boosting consumer spending. This choice impacts the rest of the current two-year budget.
As for what they expect to see in 2021 and 2022, the economists decided to go with a blend of pessimistic and control forecasts as they discussed the possibility of an economic recession. These options show slow growth with low confidence and risk aversion from Kentuckians, a decline in consumer spending, a rise in unemployment, and a slight drop in the stock market.
As for the state’s Road Fund, the Consensus Forecasting Group chose to go with the “control” model for projecting revenue rather than the optimistic or pessimistic forecasts.
These forecasts will be used by new Gov. Andy Beshear to craft his version of the two-year budget that will be presented to the General Assembly in January.