Economic Forecast Shows Impacts of COVID-19 Pandemic
DENVER - The Governor’s Office of State Planning and Budgeting (OSPB) released its quarterly economic forecast today.
“This global pandemic has had a terrible impact on the economy and our way of life. Coloradans are resilient, innovative, and talented and we will get through this challenging time together. While we are taking cautious steps to rebuild our economy, we cannot let up in our shared efforts to slow the spread of COVID-19. If Coloradans don’t wear masks in public or practice good social distancing and physical hygiene, then will see case counts rise as they have in other states and the economy will further suffer,” said Gov. Jared Polis. “I look forward to working with communities, lawmakers, and anyone to ensure the state’s economy and workforce can bounce back stronger than before.”
Due to COVID-19, Colorado lost more than 300,000 jobs in March and April, and the unemployment rate rose to 11.3 percent. Despite these dire numbers, the state’s large professional services sector is helping Colorado weather the COVID-19 recession better than most other states. However, other critical industries, such as tourism and energy, have been severely impacted and are expected to face longer recoveries.
General Fund revenue is expected to fall by 4.9 percent in FY 2019-20 and by another 10.5 percent in FY 2020-21. The General Fund revenue forecast was revised up by net of $216.9 million over the forecast period, primarily due to technical and legislative changes that increase revenue.
With these updated revenue projections, the General Fund reserve is projected to end FY 2020-21 $171.4 million above the statutory reserve amount of 2.86 percent of appropriations based on preliminary analysis of legislation passed by the General Assembly.
After two months of precipitous declines, the U.S. economy appears to have begun to grow slightly in May and June, though from extremely low levels. The U.S. economy added more than 2.5 million jobs in May after losing more than 22 million in March and April, and retail sales grew by 7.9 percent after declining by 16 percent in April. Despite this improvement, the recovery is expected to be slow and contingent upon public health conditions and federal relief measures.