CHARLOTTESVILLE, Va. -- A report from the University of Virginia predicts that Virginia could experience the most serious economic downturn since World War II due to COVID-19.
The study, published on Friday, uses a economic forecasting model model called REMI PI+ (Regional Economic Models, Inc. Policy Insight Plus) to estimate the economic effects of COVID19 on the state.
In the most severe scenario predicted by the model, "2020 GDP decline is assumed to be -6%, which would make it the most serious economic downturn since WWII, eclipsing the financial crisis induced Great Recession of 2007-09."
In the same scenario, the state is projected to lose more than 500,000 jobs and $40.7 billion in GDP in 2020 relative to baseline growth assumptions.
Under a more moderate -2% growth scenario, "the state loses almost 300,000 jobs relative to baseline and nearly $18 billion in GDP."
Under the most severe scenario, the state is projected to lose over $1 billion in revenues, growing to $1.8 billion in 2021 before declining and stabilizing at levels above $1 billion.
"Understanding the likely range of changes in income (GDP) and employment will help state and local government develop budget contingency plans that can reduce the overall costs of the economic emergency," Bill Shobe, director of the Center for Economic Policy Studies said. "We show that the loss in state tax revenues will likely be between $600 million and $1 billion in 2020 alone. Knowing this will help state agencies redirect their spending towards the most essential service."