Seattle's Economic Office presents 2025 revenue forecast amid geopolitical uncertainties

The Economic and Revenue Forecast Council meeting held on April 10, 2025, focused on the presentation of the April economic and revenue forecast for 2025 and 2026. This meeting marked the first of three revenue forecasts scheduled for the year, with subsequent updates expected in August and October. The April forecast serves as a critical checkpoint to assess revenue assumptions that underpin the biennial budget, which was endorsed by the city council the previous year.

The forecast is informed by actual revenue data from 2024, current economic conditions, and shifts in the economic outlook since last year. The council anticipates that the August forecast will guide any proposed changes by the mayor for the upcoming budget, while the October forecast will finalize the council's decisions regarding potential amendments to the budget.

During the meeting, staff from the city's independent office of economic and revenue forecasting presented three economic scenarios: optimistic, pessimistic, and baseline. The discussions highlighted the significant impact of recent geopolitical events and tariff changes on the economic landscape. Notably, the effective tariff rate has seen a dramatic increase, raising concerns about inflation and economic stability.

The presentation underscored the uncertainty surrounding trade policies and their potential effects on the local economy. Financial markets have experienced increased volatility, complicating predictions about future economic performance. The forecast indicates that while employment growth is expected to slow, a traditional recession is not anticipated. However, the pessimistic scenario suggests that higher tariffs could lead to increased inflation and prolonged higher interest rates.

In summary, the April forecast reflects a cautious outlook for Seattle's economy, with significant attention to external factors that could influence revenue and economic growth in the coming years. The council will continue to monitor these developments closely as they prepare for future budgetary decisions.