Posted October 05, 2020 09:42:38A recession that hit the U.S. and Canada last year is now hitting the state of Arkansas, according to a new report.
In a release, the University of Arkansas School of Agriculture and Natural Resources says the state is on pace for a 7.8 per cent drop in gross domestic product (GDP) this year, and a 3.9 per cent decline in consumer spending.
That’s the fourth consecutive year Arkansas is losing ground in its economy.
The economy is now forecast to be about $2.4 billion in the red, and is expected to shrink 1.9 million jobs by 2026, according the release.
The state is currently projecting to grow 1.5 per cent this year.
“The economic impact will be felt throughout the state,” the release says.
“While the impact of the economic downturn on Arkansas can be quantified, it is not a one-time event.
It will continue to have an impact on the state, its people and the economy in the years to come.”
The USDA says the economic decline is likely to continue in 2021 and 2022, with an annual loss of more than $30 billion.
That’s equivalent to about 2.2 per cent of Arkansas’ gross domestic production.
The state’s food industry is facing an even bigger challenge than in previous years, as the economic crisis has been blamed on the food sector.
The report said the food processing and retail sectors are expected to be hardest hit.
“This is a tough time for the food supply chain and food industry as we try to find a solution for the massive food shortage,” the USDA said.
The report notes that Arkansas has experienced one of the worst agricultural and agricultural-related food shortages in the nation, with the state suffering from a $9.3 billion food shortage in 2017 alone.
“Food processing is one of our fastest growing industries and is the fastest growing of the agricultural sectors,” Agriculture Secretary David Grier said in a statement.
“We know that food insecurity is a critical issue, and we’re taking immediate steps to address it.
Our goal is to be a nation of farmers, ranchers and consumers.”
While Arkansas has seen a downturn in farm and ranching output, the food production sector is expected in the state to grow again.
Grier says he is confident in his agriculture department and that it will be ready to handle the challenges of the current downturn.
Arkansas’ Agriculture Secretary has said that the food and agriculture industry will rebound in the short-term, and will be able to create jobs in the near future.
But the state’s overall economic outlook is uncertain.
“This economic downturn will impact Arkansas economically, negatively impacting our economic growth and job creation,” the state said in its release.
It is forecast to result in a 3 per cent decrease in the average household income, which will be the worst of any state.
The federal government also released its outlook for Arkansas in late October, and the report warned of a $10.7 billion shortfall for the state by 2027.
With a $30.8 billion deficit for the federal government and a $7.7-billion deficit for local governments, Arkansas is in the midst of a deep recession.
In January, the state was the hardest hit state in the U, with a $1.4-billion debt burden.