Economic and Revenue Review: March 20, 2023
- WA personal income, building permits are lower than in the November forecast
- The forecast assumes the Federal Reserve will raise the federal funds interest rate to a range of 5.25 – 5.5% by June 2023
- U.S. GDP level is slightly higher than November; stronger growth in 2023, weaker in 2024
- The forecast of funds subject to the budget outlook is increased by $194 million for 2021-23 biennium, decreased by $483 million for the 2023-25 biennium, decreased by $541 million for the 2025-27 biennium
We expect a 1.5% increase in Washington employment this year up from the 0.9% growth rate expected in the November forecast. We expect slower growth during the remainder of the forecast as the U.S economy slows. We expect employment growth to average 0.6% per year in 2024 through 2027 which is lower than the 0.9% average rate in the November forecast. Our forecast for nominal personal income growth this year is 4.7%, down from 5.4% in the November forecast. Our new forecast for nominal personal income growth in 2024 through 2027 averages 5.1% per year which is the same average rate as in the November forecast.
General Fund forecast
Including the changes in Revenue Act taxes, REET and other sources, the GFS forecast has been increased by $100 million in the 2021-23 biennium and decreased $407 million in the 2023-25 biennium, with the declines in Revenue Act and REET collections offset by increases in other sources such as insurance premium and public utility taxes.
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