JACKSON • At a legislative hearing on Tuesday, the state’s economist, Darrin Webb, predicted Mississippi will suffer a deep economic recession because of the novel coronavirus pandemic, with a long recovery effort that could take years.
The Senate Appropriations Committee convened to hear Webb and Herb Frierson, the commissioner of the Mississippi Department of Revenue, offer an update on the economic outlook for the state.
“As a general rule, the recession is expected to be deeper than what we were seeing in April, and the recovery time – because the recession time is deeper – it takes longer for us to fully recover,” Webb told legislators.
The economist compared the current recession to the “Great Recession” in 2008, and said that the current recession should be shorter than the 2008 recession, but “we have experienced decline much more rapidly” during the current recession.
“The last recession was a far more gradual decline,” he said. “This is just falling off the cliff basically in one quarter. But on the other hand, the current recession is relatively short.”
Webb predicted that the state could start recovery efforts at a quick rate, but it would still likely take years for the state to return to its pre-recession economic levels. He further predicted that the state would follow the overall pattern of the nation, but that it would do so at a slower pace.
“Like the nation, we do think recovery begins in the third quarter and strengthens in the fourth quarter,” he said.
The prediction comes as legislative leaders are crafting a budget for the coming fiscal year and economic projections could have serious ramifications for the final budget.
According to the latest date from the Mississippi State Department of Health, 13,731 people in the state have tested positive for COVID-19 and 652 people have died from complications related to the virus.
Webb warned the legislators that his prediction is based on several assumptions and that there are still unknown factors such as the virus surging again in the fall or the U.S. Congress passing a second stimulus package that could alter the economic prediction slightly. Overall, Webb said he still believes the state will follow the pattern of the nation.
“This is certainly the worst that we have ever seen in terms of our history. It’s not depression level, but it’s a steep decline, nonetheless – the steepest since World War II.”