CBO has developed preliminary projections of key economic variables through the end of calendar year 2021, based on information about the economy that was available through yesterday and including the effects of an economic boost from legislation recently enacted in response to the pandemic. In addition, CBO has developed a preliminary assessment of federal budget deficits and debt for fiscal years 2020 and 2021. CBO will provide a comprehensive analysis of that legislation and updated baseline budget projections later this year.
In the second quarter of 2020, the economy will experience a sharp contraction, and CBO’s current economic projections include the following:
- Inflation-adjusted gross domestic product (real GDP) is expected to decline by about 12 percent during the second quarter, equivalent to a decline at an annual rate of 40 percent for that quarter.
- The unemployment rate is expected to average close to 14 percent during the second quarter.
- Interest rates on 3-month Treasury bills and 10-year Treasury notes are expected to average 0.1 percent and 0.6 percent, respectively, during that quarter.
- For fiscal year 2020, CBO’s early look at the fiscal outlook shows the following:
- The federal budget deficit is projected to be $3.7 trillion.
- Federal debt held by the public is projected to be 101 percent of GDP by the end of the fiscal year.