Economists forecast the impact of COVID-19 on Tennessee budget

Economists forecast the impact of COVID-19 on Tennessee budget

MEMPHIS, Tenn. (WMC) - The road to recovery from COVID-19 will be rocky for businesses in Memphis and across Tennessee.

Tennessee Governor Bill Lee virtually joined the State Funding Board and economists Wednesday to discuss the effects COVID-19 has had on the economy.

Before economic talk got underway, you could see board members spaced out in the senate hearing room to practice social distancing while in session.

"We want to address the economic challenges that we have just as aggressively as we have addressed the public health challenge," Gov. Bill Lee said. "We need to address this with a look to the future recognizing that there will be no quick response or no quick fix here."

The board heard from five economists who had varying predictions, and being that the state has never been through a financial change so sudden, there isn't much data to use for comparison.

Dr. William Fox with the University of Tennessee Boyd Center for Business and Economic Research says we will see about a 7% percent decline in the U.S. economy for 2020 - which he says is a slow decline in economic growth.

"To put that in perspective, the great recession, the decline in GDP in 2009 - the worst year was 2.5% and so what we're seeing is pretty slow decline," Fox said.

With so much uncertainty, many economists had different projections on what recovery could look like both nationally and statewide.

Dr. John L. Smith with the Bureau of Business and Economic Research showed five graphs on what recovery could look like in the state.

Smith says it’s likely similar to national recovery numbers which could be anywhere from three to five years.

Some economists forecast even longer.

"It took us 10 years to recover from the great recession, so it's not beyond the norm of possibility," Smith said.

Governor Lee said no decisions will be made immediately, however he will take the information from Wednesday’s presentation to help when making decisions on the state’s economy in the future.

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