Georgia’s economy is set for continued growth in 2025, though at a more moderate pace than in 2024. According to a new forecast from the University of Georgia’s Selig Center for Economic Growth, the state will outperform the national average. This steady outlook is driven by a planned economic slowdown and strength in key sectors like health care and housing, ensuring stability despite broader uncertainties.
A Controlled Slowdown, Not a Crisis
The latest projections show Georgia’s economy growing by 2.4% in 2025. While this is a decrease from the 3.1% growth seen in 2024, it remains significantly stronger than the 1.6% growth expected for the U.S. economy as a whole.
Speaking at the Georgia Economic Outlook event, Terry College of Business Dean Ben Ayers explained that this deceleration is not a sign of trouble. Instead, it is the intended result of economic policies designed to manage growth. “This slowdown will be gradual and short-lived,” Ayers stated, predicting a return to faster growth in 2026.
The Federal Reserve’s adjustments to its monetary policy have been a primary factor in this controlled cooling of the economy.
Inflation and Employment in a New Balance
A major success story for Georgia is the management of inflation. After reaching a high of 8% in 2022, the inflation rate fell to 3% in 2024 and is expected to hold steady through 2025. This stability is largely thanks to the Federal Reserve’s policies, which include potential interest rate cuts.
The state’s job market will also see a slight shift. The unemployment rate is forecast to rise from 3.7% to 4%, but this figure remains below the national forecast of 4.3%. Ayers clarified that this increase will come from a slower pace of hiring, not from widespread job losses.
This small adjustment in the labor market is seen as a positive development. It is expected to help keep inflation in check without causing a major shock to consumer confidence.
Housing and Health Care to Lead the Charge
Two powerful sectors are expected to be the main engines of Georgia’s economic growth in the coming year: health care and housing. The state’s expanding population, particularly the increase in senior residents, is creating sustained demand for health care services.
Simultaneously, the housing market is poised for significant activity. A long-term housing shortage combined with favorable demographic trends is encouraging builders to increase construction.
- Home construction is projected to jump by 9%, with a strong focus on single-family homes.
- After a 65% surge since the pandemic, home prices are expected to stabilize in 2025.
- Slightly lower mortgage rates are also helping to boost the confidence of both buyers and builders.
In contrast, sectors like retail and information may see a reduction in employment due to the ongoing impact of technology and the growth of online commerce.
Georgia’s Key Strengths and 2025 Outlook
Even as the national economy slows, Georgia holds a strong competitive position. The state’s diverse mix of industries provides a buffer against downturns in any single sector. Furthermore, its strategic location and excellent transportation infrastructure continue to support business growth and attract investment.
While the pace of new major investments may slow in 2025, a pipeline of ongoing projects will ensure that job creation continues. The state’s low cost of living and business-friendly environment remain major draws. The overall probability of a recession in Georgia is estimated to be a relatively low 25%.
| Indicator | Georgia 2025 Forecast | U.S. 2025 Forecast |
|---|---|---|
| GDP Growth | 2.4% | 1.6% |
| Job Growth | 1% | 0.6% |
| Unemployment Rate | 4% | 4.3% |
| Inflation Rate | 3% | 3% |
| Housing Construction | +9% | Not available |
