Florida TaxWatch 2026 Forecast: Slower Economic Growth Ahead

Florida’s economy will keep growing through 2035, but residents and policymakers should expect a significant shift in pace, according to the latest economic forecast from Florida TaxWatch, produced in partnership with the Regional Economic Consulting Group.

The report lands at a telling moment. Florida’s gross domestic product hit $1.85 trillion in the third quarter of 2025, making the state the top economy in the nation for growth. That kind of headline number inspires confidence, but the TaxWatch forecast is asking a harder question: can Florida sustain that momentum over the next nine years?

The short answer is yes, but with caveats.

“Fueled by a strong global presence in tourism, trade, and real estate development, Florida’s economy has grown to $1.85 trillion in Q3 of 2025. Overall, Florida’s economy is now set to return to pre-pandemic growth rates over the next five years, after experiencing high economic growth in the past three years,” said Florida TaxWatch President and CEO Jeff Kottkamp.

The forecast projects GDP growth of 2.7% for 2026, a respectable number on its own terms. By 2035, that rate is expected to drop to 1.9%. That trajectory aligns with modestly easing inflation in the years ahead, though the report cautions that shifting interest rates could scramble those projections at any point.

On employment, the picture is mixed. Florida’s unemployment rate, sitting at 3.9% in 2025, is projected to climb to a peak of 4.4% in 2027 before settling back near 4% by 2035. That sounds like a warning sign, but the underlying numbers tell a more nuanced story. Total employment in the state is expected to grow from 10.1 million workers in 2025 to 11.5 million by 2035, driven primarily by continued population growth.

That population growth, though real, is also slowing down. Florida is projected to add roughly 2.6 million residents over the next decade, pushing the statewide count from 23.4 million to 26 million by 2035. Net migration, the number of people moving in minus those moving out, is expected to drop from 922 new residents per day in 2025 to 689 per day by 2035. Over the next year alone, the report anticipates that daily net figure will slip to 895.

The reasons people are leaving Florida are not subtle. High property insurance costs, sky-high auto insurance premiums, an unaffordable housing market, and increasingly severe hurricane seasons are pushing some longtime residents to look elsewhere. Georgia and North Carolina have emerged as popular destinations for departing Floridians, a trend that Spanish-language media in Miami has been tracking closely in communities where the cost of staying has simply become too high.

The TaxWatch report does not dismiss the outflow, but it argues Florida will hold its status as one of the fastest-growing states in the country. The reasoning: those competing destinations are beginning to face many of the same pressures that are pushing people out of Florida in the first place. Growing pains, it turns out, tend to follow people across state lines.

Tourism, another pillar of the Florida economy, is also projected to soften. The report notes nearly 143 million tourists are anticipated to visit the state, a strong figure in absolute terms but a signal that the post-pandemic surge in travel has begun to stabilize.

Kottkamp framed the overall findings carefully. “This forecast continues to show the growth of Florida, but at a much slower rate than the previous forecasts. This can be, in part, due to economic uncertainty in the nation, as well as a lower level of consumer confidence in the economy. The slight improvements in the short-term outlook of key indicators compared to the Q3 forecast show reasons for optimism when considering Florida’s economy,” he said.

That framing matters for Tallahassee, where state budget writers have grown accustomed to flush revenue projections fueled by explosive growth. A return to pre-pandemic growth rates is not a crisis, but it does mean the margin for error on major spending decisions is about to get narrower. State leaders who have spent years surfing an economic wave will now need to think harder about what comes after it.