Tariffs President Donald Trump has imposed since taking office last month pose the greatest risk to Georgia's economy, State Economist Robert Buschman told state lawmakers last week.
Broad and high tariffs on imports likely will drive up prices for Georgia consumers, while retaliatory tariffs levied by America's trading partners could damage export industries, Buschman said during his annual economic outlook presentation to the House Appropriations Committee. Buschman had been due to appear before the panel during the General Assembly's annual budget recess last month but was postponed by a snowstorm.
Georgia is the 12th-largest state for exports, which play a large role in industries including aerospace, pulp and paper, machinery, computers and electronics, food and other agricultural goods, and motor vehicles and parts. The Peach State exported $49.9 billion in goods in 2023, accounting for 6% of the state's Gross Domestic Product.
"You hit that 6%, you hit the economy of the state," Buschman said.
Barring any potential disruption from tariffs, Georgia's economy otherwise is strong, the economist said. Georgia continues to outperform the nation as a whole in income and employment. Personal income has grown by 10% since 2019, while Georgia's jobless rate of 3.7% in December was above the national unemployment rate of 4%.
"Low unemployment is good for consumer confidence and puts upward pressure on wages," Buschman said.
Inflation in Georgia peaked at 9% in 2022 but quickly fell to 3% the following year and has remained there, he said.
With inflation remaining low, Buschman predicted the Federal Reserve Bank will only reduce interest rates 1/4 point this year after cutting rates three times during the final months of last year.
He said the nation's banking system and consumer financial health remain strong, while loan delinquency rates remain low.
On the other hand, Buschman said he's concerned that interest rates on mortgage and auto loans are still high, while consumers continue to feel squeezed by inflation.
"Even though (inflation) has come down, incomes have just barely kept up," he said.
