The U.S. is on track for a huge $ 3 trillion deficit, according to an estimate released today (Thursday) by the Congressional Budget Office (CBO). The forecast refers to the end of fiscal year 2021, which ends in September. This is 33% higher than the last forecast published in February.
The U.S. deficit is likely to be about 13.4 percent of GDP – the second-highest level since 1945, all thanks to huge spending to fight the spread of the corona in 2020. The deficit estimate in February predicted a smaller deficit of $ 745 billion than currently forecast.
The US deficit totaled $ 3.13 trillion in 2020, and as of today, eight months since the fiscal year began, it already stands at $ 2.06 trillion. Total government debt is $ 28.3 trillion, of which the public holds $ 22.2 trillion.
“The economic damage caused by the corona plague and the legislation enacted in response to its spread continue to weigh on the deficit (which was already large by historical standards before the plague),” the ministry wrote in a report.
At the same time, the CBO also released a positive figure: an estimate that gross domestic product is expected to jump 7.4% by the end of 2021, and another 2.8% a year until 2025. The report also expresses optimism about the continued decline in unemployment “until it fell to about -4% in 2022 and will remain there for several years, “it was written. Regarding inflation, the ministry estimates that the consumer price index will rise by 2.8% this year.
Last week, US President Joe Biden announced that along with a group of senators from both parties an agreement had been reached on a $ 1 trillion infrastructure plan to renovate transportation, water and communications infrastructure. The whole Congress.