CBO: Economic growth to stall at 1.9 percent, deficits to rise

The economy will grow less quickly than projected, according to a new Congressional Budget Office (CBO) outlook released Thursday.

Under current law, the economy would grow at 2.2 percent this year and drop in 2018 to a growth rate slightly above 2 percent before settling into a 1.9 percent growth rate over the course of the next decade, the CBO projects.

President Trump’s budget proposal projected that under his policies, growth would rise to 3 percent over the course of a decade, a figure some economists say is unrealistic.

{mosads}The projected deficit for 2017 rose to 3.6 percent of gross domestic product (GDP), a significant jump from the 2.9 percent projected in the CBO’s January report. The office attributed the drop, in part, to slowing revenues and increased mandatory outlays from subsidy accounts. 

The CBO report projects that deficits will grow to 5.2 percent of GDP in 2027, pushing the national debt held by the public from 77 percent of GDP today to 91 percent over the course of a decade. 

The CBO’s projections do not take into account any of the budget proposals currently being considered in Congress, and instead reflect current law, which includes a steep belt-tightening in discretionary spending known as sequestration. 

But new data on increasing debts and slowing growth are likely to fuel the ongoing debates on the budget.