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Photo: John McDonnell/The Washington Post via Getty Images
The national deficit is forecast to increase sharply to $3.7 trillion in the 2020 fiscal year, according to a Congressional Budget Office projection out Friday.
By the numbers: The report paints a grim picture of the U.S. economy in the second quarter of 2020. The unemployment rate is expected to average roughly 14% in that time, while GDP is projected to decline by about 12%. Interest rates on 3-month Treasury bills and 10-year Treasury notes are expected to average around 0.1% and 0.6% respectively.
- The report projects a 15% average unemployment rate during both the second and third quarters of 2020.
Why it matters: The numbers quantify the scale of the measures Congress has taken to address the coronavirus pandemic. In March, before Congress enacted most of its legislation to address the outbreak, the CBO projected $1 trillion deficits for both 2020 and 2021.
- In fiscal year 2021, the new projection has the deficit at $2.1 trillion.
- The CBO projects publicly held federal debt to be 101% of GDP by the end of the fiscal year.
- It also anticipates the deficit will be 17.9% of national GDP this year, and 9.8% of GDP in 2021 — compared to 4.6% in 2019.