The federal deficit is expected to hit a record 3.3 trillion dollars this year in the United States, more than double the highest level on record in the country, while remaining below estimates by economists.
According to new projections from the Congressional Budget Office (CBO), the deficit will represent 16% of gross domestic product (GDP), the highest rate since 1945. The explosion in the deficit follows a massive government response to the pandemic COVID-19 and the economic devastation it has caused.
Congress has passed some $ 3.6 trillion in urgent measures to revive the economy and support the health sector during the pandemic.
This aid, along with the Federal Reserve’s deep monetary interventions, likely prevented an even worse economic outlook, according to exports. Previous estimates put the annual deficit at an even higher level at $ 3.8 trillion.
The report released on Wednesday by the CBO also found that the country’s debt is on track to exceed 100% of GDP for the first time since World War II in 2021, but will remain at 98% this year, a figure lower than expected.
Even before the pandemic, the deficit was expected to exceed $ 1,000 billion for the first time since the Great Recession this year, as deep tax cuts, increased spending, and demographic shifts increased the economy. gap between government revenues and expenditures.