Robert Sumichrast, who heads the University of Georgia's business school, also predicted unemployment will spike, housing prices will continue to plummet and the economy will be "dreadful" through the first half of next year.
The news came amid a bleak economic backdrop that darkened with the news that Gov. Sonny Perdue was quietly urging most state agencies to slash budgets an additional 2 percent to meet a growing deficit.
The governor has already ordered the agencies to cut spending by at least 6 percent to close a $1.6 billion budget deficit, but his office said deeper cuts are likely needed as the economy worsens.
"We've told them all that eight percent is more and more likely because of the economic conditions," said Perdue spokesman Bert Brantley. "We've told them to be prepared for deeper cuts."
The state's higher education system took pre-emptive action Wednesday, voting to hike student fees and require employees to shell out more for health care costs to meet the 8 percent target. Other agencies could take similar action in the coming weeks.
Sumichrast said Georgia's economy could begin to rev up again by the third quarter of 2009, but he predicted it will be a "joyless recovery" marked by slow commercial construction and anemic job growth.
He did offer some encouragement to the hundreds of business leaders who packed the school's economic conference: Start preparing and investing now for an eventual rebound.
"We're about halfway through the really bad stuff," said Sumichrast. "Now is not the time to lose your nerve. We're not looking at a 1930s style Depression."
The grim outlook is old news by now to Georgia's business and political leaders. But the report from Sumichrast and other top economists will help state legislators shape fiscal policy in the run-up to January's legislative session.
The lawmakers are preparing to further chop the budget with a meat cleaver at the Capitol next month, and Perdue said he hopes the belt-tightening will prepare Georgia to take advantage of the economic rebound down the road.
"We will manage this downturn just like we did six years ago. We will emerge more focused on our basic tasks - leaner and stronger," the governor told the conference. "We will be prepared to take advantage of our business looking to invest when the national economy rebounds."
It may be a while. Sumichrast predicted unemployment will peak at 9 percent in early 2010 - more than doubling from the unemployment rate of 4.4 percent in 2007. All told, the state could lose some 175,000 jobs in this recession, 25,000 more jobs than were lost from the 2001 downturn.
New home construction will also continue to drop through June 2009 before showing signs of recovery, he said.
For some, though, the meltdown could bring opportunity. Sumichrast said businesses geared toward dealing with economic fallout - such as private security firms - could be in for a windfall. He said others with cash to spare should start preparing for the rebound.
"This is the time to plan and soon it will be time to act," he said. "Rents are depressed. Talents are available. And established businesses are cutting back on promotions. That increases the chances that the message from your new business will be noticed."
The political class also seems willing to take advantage of the financial doldrums to promote new ways to cut spending and overhaul costly programs. Perdue repeated a mantra that has quickly become popular as politicians look for new ways to halt the growing financial mess.
"A crisis," Perdue said, "is a terrible thing to waste."
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