The U.S. economy is recovering faster than previously predicted, but the government will see a deficit of over 3 trillion dollars again this year, the Congressional Budget Office said.
The deficit is slightly lower than in the 2020 fiscal year, but higher than projected in February estimates due to the massive stimulus program approved in March with the projected total “triple the shortfall recorded in 2019.”
The nonpartisan agency said in its update, “Relative to the size of the economy, this year’s deficit is projected to total 13.4 percent of gross domestic product, making it the second largest since 1945.”
Meanwhile, federal debt is projected to rise to 23 trillion dollars – nearly 103 percent of GDP, the report said.
But with the surge in consumer demand and rapid employment gains in the second half of the year, it projects the economy will expand by 6.7 percent by this year – two percentage points higher than the February report.