Feb. 11 (UPI) — Federal debt will hit 102% of Gross Domestic Product in 2021, Congressional Budget Office said Thursday.
The amount represents a slight increase from the federal debt reaching 100% of GDP last fiscal year, the CBO said in an economic outlook report for the next decade released Thursday.
The report noted that it incorporated legislation enacted through Jan. 12.
The federal budget deficit projected at $2.3 trillion this year is nearly $900 billion less than the $3.13 trillion shortfall last year, but still larger than prior to the pandemic.
Over the decade, annual deficits will average $1.2 trillion a year, and will exceed the 50-year average of 3.3% of GDP each year, according to the report.
“Those deficits, which were already projected to be large by historical standards before the onset of the 2020-2021 coronavirus pandemic, have widened significantly as a result of the economic disruption caused by the pandemic and the enactment of legislation in response,” the CBO said in the report.
By 2031, the federal debt is projected to equal 107% of GDP, the highest in the nation’s history, the CBO said.
The CBO also said the GDP is expected to grow 3.7% this year, reaching levels prior to the pandemic by the middle of the year, and unemployment will gradually decline, returning to pre-pandemic levels in 2024.