The state’s chief financial officer expressed guarded optimism yesterday about the Massachusetts economy while acknowledging continued fiscal challenges facing the commonwealth.

Secretary of Administration and Finance Matthew Gorzkowicz told 200 business leaders at the AIM Executive Forum that moderating interest rates, coupled with Healey Administration initiatives on housing and tax relief, have put the commonwealth on solid ground.

“Everything we’ve done since coming into office has been with an eye toward improving Massachusetts’ affordability, equity and competitiveness. These are the top priorities of the Healey-Driscoll administration,” Gorzkowicz said.

“We want to make sure corporations, small businesses, non-profits and families can not only afford to stay in Massachusetts, but that they can thrive here.  And we know that our health as a state is dependent on people having access to good jobs, housing and a strong quality of life.”

Gorzkowicz acknowledged that state revenue growth has slowed and that the administration has adjusted spending to be more in line with a sustainable revenue growth rate. State officials were forced to revise down revenue estimates for Fiscal Year 2024 by $1 billion and take a series of actions, which included mid-year budget reductions, to ensure the budget remained in balance.

He noted that Governor Maura Healey recommended a Fiscal Year 2025 budget that limits spending growth to 2.3%.

“As we move into FY25, we continue to believe there is some additional risk including: The revenue trends we saw in FY24 continuing in FY25; some unavoidable deficiencies we know we will need to address later in the year; and interest-rate assumptions that were assumed in our revenue estimates,” he said.

Gorzkowicz nevertheless remains upbeat about the economic picture in part because of what he said has been “active and responsible management of our financial resources.”

He also pointed to the potential of significant federal funding, the pending economic development bill and the recently passed Affordable Homes Act as reasons for optimism.

Housing and workforce development remained common themes as a panel of business leaders responded to Gorzkowicz’s remarks.

Gus Faucher, Senior Vice President and Chief Economist at PNC Bank, predicted that the Federal Reserve’s move to lower interest rates will ripple through the economy through the middle of next year. Variable-rate business loans may be affected immediately, he said, while mortgages and other instruments will take longer to adjust.

Elaine Shannon, Global Quality Officer at Takeda, said the company is committed to investing in talent and encourages lifelong learning among its thousands of employees in Massachusetts. Shannon noted that Massachusetts remains a center for the biosciences industry that is also establishing valuable connections with other technology sectors such as artificial intelligence.

Keith Fairey is President & CEO of Way Finders, a Springfield-based affordable housing organization, encouraged business leaders to become more involved in the creation of affordable housing in Massachusetts.

“We need more investment in affordable housing,” Fairey said.