Saint Cloud State University economist King Banaian says dramatically falling gas prices we’re seeing could foreshadow tough economic times in the near future. Banaian says low prices at the pump could be the result of a massive increase in supply — or indicate the onset of a recession:
“And it think it’s the latter…. There is a drop in demand. Higher prices (in the rest of the economy) have dropped demand (for gasoline), and actually think we are leading ourselves toward a recession. I don’t know if it’s started already, if it’s gonna start this month in December, (in) January, February. I don’t know when.”
The state has a 17-billion-dollar budget surplus and Governor Tim Walz is pushing for rebate checks. Banaian says that might help to lessen the impact of a recession, but the overall effect would likely be small.