The american economy could be found to be 15.7 billion dollars girl in the next decade if Congress does not mitigate the economic damage arising from the pandemic coronavirussaid Monday the Office of Budgetary Matters of the Congress.
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The CBO, which had already issued a report that predicted a serious economic damage in the next two years, expanded that provision to show that the severity of the economic impact could reduce the growth for a long time.
The new estimate says that during the period from 2020 to 2030, the total GDP could be found to be 15.7 billion dollars less than what the CBO had projected just in January. That would be equivalent to a loss of 5.3% of GDP in the next decade.After adjusting for inflation, the CBO said that the lost production will mean a total of 7.9 billion dollars, a loss of 3% of GDP adjusted to inflation.
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The CBO said it was a “significant reduction” of GDP as a result of the pandemic.
“It is anticipated that the closures of business and social distancing measures reduce the expense of the consumer, at the time that the forecast is that the recent fall in energy prices will significantly reduce american investment in the energy sector,” said Philip Swagel, director of the CBO, in a letter.
“Recent legislation, according to the assessment of the CBO, will mitigate partially the deterioration of the economic conditions,” said Swagel in the letter to senators Chuck Schumer and Bernie Sanders. Both had asked for the information to put pressure on the republicans to follow the example of the House of Representatives and approve more economic aid.
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“Last week we learned that more than 40 million americans lost their jobs as a result of this terrible pandemic”, said Schumer and Sanders in a joint statement. “Today, the CBO tells us that if current trends continue, we will see a reduction of $ 16 trillion in the economic growth in the next decade.”
Schumer and Sanders said that the republicans should quit blocking a bill to provide more help, given that 40 million workers have lost their jobs because of the containment measures that have been made to the drop in the economy.
“To avoid the risk of another Great Depression, the Senate must act with a great sense of urgency,” noted Schumer, and Sanders.
The CBO predicted that the GDP, which declined at a rate of 5% in the first three months of the year, will fall to a rate of 37.7 per cent in the quarter from April to June, representing the biggest decline quarterly record.
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