California's economy is poised to have a "euphoric" recovery following the COVID-19 downturn, UCLA economists predict, and the state will rally faster than the United States.
The UCLA Anderson quarterly forecast says California's decisions to enact mask mandates, social distancing requirements, and restrictions at businesses and restaurants protected the state's economy. California's technology and white-collar business sectors and a home construction boom will also help offset the gradual return of tourists and hospitality jobs, the Los Angeles Times reports. There are some uncertainties, however — a lot depends on if more Californians leave the state for places with lower housing costs and how quickly international tourists return.
The forecast projects the nation's gross domestic product will increase 7.1 percent this year, moving to 5 percent in 2022 and 2.2 percent in 2023. Leo Feler, senior economist at the UCLA Anderson Forecast, told the Times the U.S. and California "are about to have one of the best years of economic growth that we've had since World War II," and this will be a "euphoric" recovery due to COVID-19 stimulus packages.
"We never fully bounced back after a tepid response to the great financial crisis" in the late 2000s, Feler said. "That led to negative economic, political, and social effects. So we learned a lesson. This time, we pumped a lot more money into the economy."
People are ready to get out there and spend, Scott Anderson, chief economist at the Bank of the West in San Francisco, told the Times. "The U.S. and California pandemic recovery is expected to be as exceptional as the pandemic recession was dire," he said. "Consumers, flush with swelling bank accounts, record personal savings and household wealth, and an appetite to spend like a sailor on furlough will drive the recovery."