CBO projects a federal budget deficit of $1.0 trillion in 2022 and an average annual shortfall of $1.6 trillion from 2023 to 2032, under the assumption that existing laws governing taxes and spending generally remain unchanged. Federal debt held by the public is projected to dip to 96 percent of GDP in 2023, but then to rise each year thereafter, reaching 110 percent in 2032, higher than it has ever been.
In CBO’s projections, elevated inflation initially persists in 2022 and then subsides as supply disruptions dissipate, energy prices decline, and less accommodative monetary policy takes hold. The price index for personal consumption expenditures increases by 4.0 percent in 2022, real (inflation-adjusted) GDP grows by 3.1 percent, and the unemployment rate averages 3.8 percent.
