Georgia’s economy is expected to grow by 2. 4% in 2025, a decrease from 3. 1% this year, according to Ben Ayers, dean of the University of Georgia’s Terry College of Business. Despite this slowdown, Georgia’s performance will remain better than the national average of 1. 6% growth. Ayers noted that the slowdown is due to a planned policy change rather than unexpected shocks, which suggests it will be gradual and short-lived.

The main factor contributing to this economic slowdown is the Federal Reserve’s actions in 2022 to limit lending to manage inflation. This decision has helped reduce inflation from 8% in 2022 to 3% currently, and it is expected to stay at 3% in 2025. As inflation decreases, the Fed has started lowering interest rates, which Ayers anticipates will continue into 2025, with quantitative tightening concluding as well. These measures, coupled with a strong job market and positive economic trends, are expected to support Georgia’s economy through 2025 and lead to growth in 2026.

Ayers also predicted a slight rise in Georgia’s unemployment rate from 3. 7% to 4%, which is still lower than the national forecast of 4. 3%. This increase will result from reduced hiring rather than layoffs. Economist John Silvia raised concerns about the uncertain national economic outlook for 2025 under President-elect Donald Trump, mentioning potential tax cuts, regulations, tariffs, and immigration policies. Silvia warned that such actions, particularly on tariffs and immigration, could negatively impact industries reliant on immigrant labor, like agriculture and construction, which are crucial to Georgia’s economy. He believes inflation is unlikely to drop back to 2%, and interest rates will stay high.