Economics

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Economic Outlook

The economy is expected to slow in 2025 after strong growth in 2023 and 2024. Over the course of this year, consumption and jobs growth are expected to stall while real estate markets and corporate profits are projected to stagnate. After volatile economic growth in the first half of 2025 as businesses react to uncertainty around tariff policy changes, OSPB expects a decline in GDP in the third quarter followed by flat growth to end the year. Inflation is expected to reaccelerate in the second half of the year, largely due to changes in tariff policies, but with Colorado impacted marginally less than the nation as a whole. Given that tariffs are more elevated than in March, with additional federal policy uncertainty dampening consumer and business demand, OSPB has revised the likelihood of a recession in the next 12 months up to 50 percent compared to 40 percent in the previous forecast. If tariffs had remained at the levels they reached in April, recession risk in this forecast would have been even higher.