If 2025 was the year of uncertainty in the American economy, 2026 will see improvements in overall economic growth, according to a Bank of America economist.
“If 2025 was positive on growth, I’m absolutely elated when I talk about the 2026 outlook,” said Shruti Mishra, a U.S. economist at Charlotte-based Bank of America.
Mishra was the keynote speaker at the Central Mass. Economic Forecast Forum put on by Worcester Business Journal and the Worcester Regional Chamber of Commerce. About 150 people attended the Feb. 26 event at the AC Hotel Worcester. The forum included Mishra’s keynote and panel discussions on the Central Mass. economic outlook and the local real estate market.
“The outlook for commercial and industrial [real estate] in Worcester is very good, but like with everything, it takes time,” Jim Umphrey, president of Worcester-based real estate brokerage Kelleher & Sadowsky Associates, said during the real estate panel.
In her keynote speech, Mishra said heading into 2025, the main concerns for the national economy were the potential impacts of President Donald Trump’s policies on tariffs and immigration, particularly as it related to the workforce. The actual economic impact of both tariffs and immigration enforcement weren’t as big as anticipated, she said.
However, the uneven communication and shifting policies on both tariffs and immigration created a lot of uncertainty in the national economy, as businesses were hesitant to make any significant investments in their operations, Mishra said.
“2025 was the year uncertainty shocked the economy,” she said.
For the rest of 2026, Mishra said she is bullish on the economy. The uncertainty around tariffs will continue for some of the year, with Trump promising to impose new tariffs after the Supreme Court ruled the 2025 ones illegal.
However, with the midterm elections looming, Trump will be incentivized to clarify his approaches to tariffs, which will help reduce uncertainty for businesses, she said.
“The worst from tariffs and inflation is behind us,” Mishra said.
Additionally, the economic benefits of the One Big Beautiful Bill Act will start to be realized this year with tax refunds expected to be 25% higher, she said. That will increase consumer spending, which is the main driver of the U.S. economy. Overall economic growth will grow from 2.2% in 2025 to 2.8% in 2026.
Despite the growth, the U.S. will not see much progress on inflation, she said. Last year, inflation was largely in a neutral phase, but prices still increased at a higher rate than the Federal Reserve’s target of 2%. Mishra predicted inflation would average 2.7% for 2026 before coming down to the Fed’s target in 2027.
During the real estate discussion at the event, the panelists were excited about a variety of new developments coming to Central Massachusetts in the next few years, particularly the GreenTech Park advanced manufacturing office park in Worcester, the redevelopment of the Solomon Pond Mall in Marlborough, the Curtis Apartments redevelopment by the Worcester Housing Authority, and the adaptive reuse of the former Fallon Health headquarters in Worcester into apartments.
Cities like Worcester and Marlborough offering tax breaks to projects like these help make them financially viable, said Jackson Restrepo, founding partner of Restrepo Properties in Worcester.
The public often misunderstands how these tax breaks work, which can lead to publicity problems, Restrepo said. Under one of the more common tax breaks – tax-increment financing – the municipal government still receives more tax money than it would if a property remained undeveloped, but the TIF allows the property owner to reduce the increase in taxes for a certain number of years, before the tax break goes away.
“Everybody wins in this scenario,” he said.
Brad Kane is editor of the Worcester Business Journal.
