Congressional incentive programs will only “partially mitigate the deterioration of economic conditions.”
The US economy needs about 10 years to recover from a coronary crisis and the restrictions imposed in connection with it. This is evidenced by estimates of the Congressional Budget Office (CBO).
According to the forecast for the economy for 2020-2030, the volume of GDP in real terms for this period will be 3%, or $ 7.9 trillion, lower than expected in January of this year.
In nominal terms, GDP will be lower by 5.3%, or 15.7 trillion dollars, according to the CBO. The difference in real and nominal GDP indicators almost completely reflects the expected slowdown in inflation as a result of the pandemic.
The report says that US GDP will not reach the levels projected by the CBO in January, earlier than the fourth quarter of 2029.
The $ 3.3 trillion stimulus program approved by Congress since March this year will only “partially mitigate the deterioration in economic conditions,” the CBO expects.
“We will see the initial jump in an economic activity simply as a result of the abolition of lockdowns, but in the future, I think the economy will grow more slowly than it did before the COVID-19 pandemic,” said Michel Meyer, chief US market economist at BofA Merrill Lynch.
According to the May CBO forecast, US GDP in the fourth quarter of 2020 will decline by 5.6% in annual terms. Before the pandemic, an increase of 2.2% was projected.
As reported, in the first quarter of 2020, the US economy contracted for the first time in six years by 4.8%.