Austin Business Journal – by Greg Barr
The Texas economy is predicted to begin a slow, steady recovery in 2010, according to an economic report released Monday.
After a small contraction in 2009, the state’s gross domestic product is expected to increase by 1.7 percent in 2010, aided in part by a surge in home sales, according to economists with BBVA Compass. The GDP of the entire country, by contrast, is predicted to increase by only 0.2 percent next year.
The bank’s U.S. Regional Watch third-quarter report released Monday, said that although the worst of the economic crisis has passed, fiscal pressures will affect some states more than others and dictate the pace of their recovery.
Though 48 states predicted budget shortfalls at the beginning of the year, with Texas projecting a 9.5 percent deficit, it is the only state among the seven Sun Belt states covered by BBVA Compass to forecast a balanced budget in 2010.
“Texas has fared the best with revenue growth exceeding the U.S. average,” the report said. “The higher than average growth throughout 2008 could be one of the reasons that Texas is better positioned with a smaller than average budget gap going into FY2010 and no expected gap for FY2011.”
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