Outlook for the Budget and the Economy

Extending the 10-year budget projections it published on January 17, 2025, CBO projects that federal debt held by the public, boosted by sustained deficits, will grow far beyond any previously recorded level over the next 30 years.

CBO provides additional details about the economic forecast it published on January 17, 2025, in The Budget and Economic Outlook: 2025 to 2035.

In CBO’s projections, the federal budget deficit is $1.9 trillion this year, and federal debt rises to 118 percent of GDP in 2035. Economic growth slows and inflation declines over the next two years; both remain moderate after 2026.

CBO provides details about its latest projections of the economy through 2027. Those projections reflect economic developments and current law as of December 4, 2024.

CBO’s Director describes how expiring provisions of the 2017 tax act affect the agency’s baseline projections and reviews some information that has become available since CBO first estimated the effects of the tax act in April 2018.

In CBO’s projections, the deficit totals nearly $2 trillion this year. Large deficits push federal debt held by the public to 122 percent of GDP in 2034. Economic growth slows to 2.0 percent in 2024 and 1.8 percent in 2026 and later years.

CBO provides information about how its most recent budget projections would change under different assumptions about future legislated policies.

In CBO’s projections, federal budget deficits total $20 trillion over the 2025–2034 period and federal debt held by the public reaches 116 percent of GDP. Economic growth slows to 1.5 percent in 2024 and then continues at a moderate pace.

In CBO’s latest projections, economic growth slows and then picks up over the 2023–2025 period. That initial slowdown in economic growth drives up unemployment. Inflation continues to gradually decline.

CBO summarizes in graphic form its projections of what the economy would look like this year and over the next decade if current laws governing federal taxes and spending generally remained in place.

CBO projects the budgetary effects of automatic stabilizers—as well as the size of deficits without them—from 2022 to 2032 and provides historical estimates of the stabilizers’ effects since 1972.

By providing financial support to households, businesses, and state and local governments, federal laws enacted in response to the 2020 coronavirus pandemic will offset part of the deterioration in economic conditions brought about by the pandemic.