If UCSB economists are right, California is in for a rough couple of years: Unemployment will hit double-digits, the economy will continue to deteriorate throughout 2009 and into 2010, and even immigration will fall.

These predictions are part of a bleak picture painted by the UCSB Economic Forecast Project in their most recent report, released last week. At a meeting Thursday, EFP Executive Director Dr. Bill Watkins outlined the report in grim detail, forecasting a deep and lasting recession on both the national and state level.

According to Watkins, the economy in nearly all sectors of the U.S. and California will experience negative growth into the foreseeable future. Watkins predicts the national unemployment rate could rise as high as 9.2 percent by the beginning of 2010, and the report states that California’s unemployment may hit as high as 11 percent in 2009.

Watkins said that California – the eighth largest economy in the world – is already feeling the symptoms of a serious recession and will continue to. Along with dire employment predictions, Watkins said that domestic immigration to California may fall in the next few years – a rare event for the Golden State.

“It is now uncontroversial that California is in a recession,” Watkins wrote in the report. “[California] has been much harder hit by the real estate collapse than have most other states. It started losing jobs before the United States began losing jobs. Its output began declining before that of the United States.”

Watkins identified the current California budget crisis and misguided economic policies as the primary factors driving the downturn.

“There are things states can do,” Watkins said. “These mostly revolve around making the state more competitive with other states. That means things like lower taxes, more limited regulation, an educated work force, investment tax credits, and reducing uncertainty associated with taxes and regulation. At a minimum, state governments should ‘do no harm.’ California’s government, though, is not serious about economic development. It will probably not even meet this minimal test.”

Along with an increase in unemployment, the EFP predicts that the average income of those with jobs will also decrease. In 2009, the report says that personal income in the United States could fall by as much as 4.9 percent. The EFP also forecasts the gross domestic product of the United States could decrease at a rate of 3.3 percent in 2009.

Statewide, the EFP predicts that California’s gross domestic product will also decrease over the next several years, slipping at a rate of 4.8 percent in 2009 and 2.7 percent in 2010. California represents more than 12 percent of the nation’s GDP.

The report did, however, contain a few optimistic notes. Despite a predicted decline in GDP over the next few years, the EFP anticipates growth in GDP by 2011. In addition, the EFP’s findings show that some parts of California have been surprisingly resilient to the ailing economy. Watkins said the Bay Area is weathering the recession better than most parts of the country, a fact Watkins attributes to the region’s strong biotechnology industry.

According to Professor Peter Rupert, vice chair of the UCSB Economics Dept., the report is a projection and not a statement of certainty. Most economic forecasts, Rupert said, are not accurate reports on the economy.

“Forecasting is more of an art than a science.” Rupert said. “Forecasting is really, really difficult. People look at what happens in the past and use that to help them figure out what’s going to happen in the future.”

Still, Steve Hollister, a mortgage broker and member of the EFP’s California Board of Directors, said he trusts the report’s findings. Hollister said he has been attending the forecasts for 10 years, and continues to trust the EFP’s predictions.

“[Watkins] tends to be more accurate than not,” Hollister said.

Chancellor Henry T. Yang, who attended the EFP meeting, said the report is a useful tool in interpreting the severity of the current economic crisis facing the state.

“In today’s challenging economic times… we need wisdom,” Yang said.