Virginia GDP growth falls below average in second quarter

(The Center Square) – Virginia’s GDP growth rate in its second quarter of the fiscal year finished well below average when compared to the rest of the country, according to a report from the U.S. Bureau of Economic Analysis.

The commonwealth saw a 5.8% GDP growth, which landed it behind most of its neighbors and nearly 1 percentage point below the national average of 6.7%.

Tennessee, which had a growth rate of just 5.6%, was the only neighboring state Virginia outperformed. Maryland had a growth rate of 6.1%, North Carolina had a growth rate of 6.2%, Kentucky had a growth rate of 6.5%, Washington, D.C. had a growth rate of 7.2% and West Virginia had a growth rate of 7.3%. GDP growth rates ranged between 1.8% and 9.7% throughout the country.

“This goes hand in hand with the weak growth in the number of jobs since the end of the COVID recession,” Stephen Haner, a senior fellow for state and local tax policy at the free-market Thomas Jefferson Institute told The Center Square.

“They are two sides of the same coin,” Haner said. “Virginia’s current leaders have other priorities, and are focused on policies that increase the cost of doing business, increase energy prices and discourage investment. There is a discouraging acceptance of mediocrity.”

Under the Northam administration, the state increased minimum wage, introduced a carbon trading program, increased taxes on gasoline and cigarettes and gave counties the authority to impose higher taxes on certain businesses. Many of these changes received criticism from Republicans and some members of the business community who warned they could stunt economic growth.

The Northam administration did not respond to a request for comment from The Center Square.

According to the BEA report, state increases in GDP were partially related to the continued economic recovery from the COVID-19 pandemic, the reopening of establishments and the continued government assistance related to COVID-19. Loans to businesses and grants to local governments increased in the second quarter and social benefits to households decreased.

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