The Congressional Budget Office (CBO) provides a comprehensive forecast based on current laws, including the assumption that the 2017 individual tax cuts will expire at the end of 2025. Here’s a summary of their projections:
- The CBO forecasts the U.S. fiscal year 2024 deficit at $1.507 trillion, a decrease from the FY 2023 deficit of $1.695 trillion.
- Over the next decade, the cumulative deficit is expected to be $20.016 trillion, slightly lower than the previous estimate for 2024-2033 of $20.314 trillion.
- The forecast for FY 2024 shows a deficit at 5.3% of GDP, with an increase to 6.2% by FY 2034, compared to the FY 2023 deficit of 6.3%.
- U.S. public debt is projected to rise to 116% of GDP by the end of FY 2034, up from 97.3% at the end of FY 2023.
- Real GDP growth is expected at 1.5% in calendar 2024, with growth rates of 2.2% projected for both 2025 and 2026, following a 3.1% growth rate in 2023.
- Core PCE price index inflation is forecasted to be 2.4% in 2024 and 2.3% in 2025, after a 3.2% rate in 2023.
- The unemployment rate is expected to be at 4.4% from 2024 through 2026, after being at 3.7% in 2023.
- Reductions in the 10-year deficit projections are primarily due to discretionary spending caps enacted in 2023 and stronger GDP growth and employment than previously projected.
- Revisions related to clean energy tax credits and EPA emissions standards are expected to increase the FY 2024 deficit by $24 billion and the 2024-2033 deficit by $428 billion.
- U.S. net interest costs are forecasted to be 3.1% of GDP in FY 2024, rising from 2.4% in FY 2023, and are expected to reach 3.9% by FY 2034.
Although the government deficit is always a concern, and that interest costs are expected to rise sharply, the projection still call for solid growth with relatively low unemployment.
Nevertheless, these are are just projections and projections tend to be wrong.
This article was originally published by Forexlive.com. Read the original article here.