US CBO projects federal budget deficit to drop to USD1.87T in fiscak 2025
Date
1/19/2025 8:27:01 AM
(MENAFN) The US Congressional Budget Office (CBO) has projected that the federal budget deficit will decrease slightly to USD1.87 trillion for fiscal year 2025, compared to USD1.91 trillion in fiscal year 2024. This marks a modest reduction in the government’s budget shortfall. The CBO report also forecasts that the deficit will continue to decline to USD1.71 trillion in the following year, although it predicts a significant increase to USD2.7 trillion by 2035.
Alongside the deficit projections, the CBO report highlighted concerns about the growing public debt in relation to the nation’s gross domestic product (GDP). The ratio of public debt to GDP, which stood at 97.8 percent in the previous year, is expected to rise to 99.9 percent in 2025. The ratio is projected to continue its upward trajectory, reaching a record high of 118.5 percent by 2035, signaling increasing fiscal challenges.
The report also pointed to a slowdown in economic growth, with the CBO estimating that the growth rate, which was 2.3 percent in the previous year, will decrease to 1.9 percent in 2025 and further dip to 1.8 percent in 2026. This reduced growth could further complicate efforts to manage the nation’s fiscal outlook and address the rising deficit and public debt.
These projections underscore the fiscal pressures facing the US government, with potential implications for future policy decisions regarding government spending and tax revenue. The anticipated slowdown in economic growth coupled with rising debt levels will likely be key factors in shaping the country’s fiscal strategy over the coming years.
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