Dr. Michael Pakko, chief economist and state economic forecaster at the Arkansas Economic Development Institute at the University of Arkansas at Little Rock, addresses how economic forecasting during the pandemic gives an unusual level of uncertainty, particularly by the end of 2020.
“There is a great deal more uncertainty around the forecast than usual,” he said. “The course of the virus, the success of vaccine development and distribution, and the degree of government financial support will all affect the timing of economic recovery.
“Moreover, there are interesting questions about how longer-term trends will be affected by our experience during the pandemic. Trends toward remote-working, online shopping and more at-home meals are examples of how our behavior has been affected. If these trends continue, there will be implications for the nature of economic growth going forward.”
He projects that, though the economy may never return to “normal,” both the state and the nation will have a healthier GDP by 2022.
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