Oregon’s Economic Forecast Shows Resilience With Recession Risk Now Diminishing
The fourth quarter economic outlook for Oregon shows continued resilience. However, the risk of recession is diminishing, with a modest improvement in 2026 forecast by the Office of Economic Analysis (OEA).
The Forecast Helps the State Government Budgeting Process
The quarterly revenue forecasts are open to public scrutiny and form the basis for the bulk of the Oregon state government’s budgeting process.
Economists Carl Riccadonna and Michael Kennedy examined all sources of revenue contributing to the General Fund (personal and corporate income tax), the lottery, and the Corporate Activity Tax.
The Forecast Was Complicated by a Lack of Statistics because of the Federal Government Shutdown
The economists say the fourth-quarter forecast was complicated by a lack of economic statistics resulting from the federal government shutdown. However, economic resilience at the national and state levels is expected to continue.
The revenue forecast for 2025-27 shows a predicted increase of $309.5 million, largely due to a recent upturn in Corporate Income Tax receipts. Economists note that this revenue stream is particularly challenging to forecast due to its significant quarter-to-quarter volatility.
A mild improvement in the economy is forecast for all other revenue streams. The projected General Fund end-balance has improved, reducing a $372.7 million deficit to $63.1 million from last quarter.
The Office of Economic Analysis operates within the Department of Administrative Services to provide objective forecasts of the state’s economy, revenue, population, corrections population, and Youth Authority population.
The forecasts are used across the state government and by the public to inform the state budgeting process.