CBO estimates that the federal budget deficit in 2020 will be $1.0 trillion, or 4.6 percent of gross domestic product (GDP). If current laws governing federal taxes and spending generally did not change, the projected gap between outlays and revenues would increase to 5.4 percent of GDP in 2030. Federal debt held by the public would rise over the coming decade, from 81 percent of GDP in 2020 to 98 percent of GDP in 2030.
Inflation-adjusted GDP is projected to grow by 2.2 percent this year, largely because of continued strength in consumer spending and a rebound in business fixed investment. Output is projected to be higher than the economy’s maximum sustainable output in 2020 to a greater degree than it has been in recent years, leading to higher inflation and interest rates after a period in which both were low, on average. CBO projects that continued strength in the demand for labor will keep the unemployment rate low and drive employment and wages higher. Over the coming decade, the economy is projected to expand at an average annual rate of 1.7 percent, roughly the same rate as its potential rate of growth.