On Monday, Minnesota Management and Budget published a quarterly revenue review for November and December, showing revenues are 4.3% higher than projected in the November forecast. Although this update reflects the current biennium, this is generally good news for the upcoming February economic forecast, which will project a budget surplus or deficit for the 2022-23 biennium. That forecast will set the stage for Gov. Walz and the Legislature to craft a budget for the next biennium, and we will share an overview of the February forecast when it is published.
The national economic outlook was also updated, showing projected real GDP growth nationally to grow 4% in 2021, above the 3.1% projected in November. This updated forecast has an improved outlook partially due to the impact of the $900 billion pandemic relief bill Congress passed in December, effectively supporting the economy into the new year. This figure could be further supported with more federal pandemic relief in 2021.
