US federal deficits projected to nearly triple over next 3 decades: Report

By Ovunc Kutlu

ANKARA (AA) - The US' federal deficits are projected to nearly triple over the next 30 years, according to a report by the Congressional Budget Office (CBO) released Wednesday.

Federal deficits are estimated to increase from 4% of gross domestic product (GDP) in 2022 to 11% in 2052, said the 2022 Long-Term Budget Outlook.

"Such persistently growing deficits would cause federal debt held by the public, which is already high, to continue to rise even further," it said.

The CBO estimated the debt to climb up to 185% of GDP in 2052.

However, the projected deficit in 2022, which is at 3.9% of GDP, is much smaller than those recorded in 2020 and 2021, "because federal spending in response to the coronavirus pandemic has waned and revenues have risen sharply," said the report.

Federal debt held by the public is projected to equal 98% of GDP by the end of 2022, according to the report.

Debt that is high and rising as a percentage of GDP could slow economic growth, push up interest payments to foreign holders of US debt, and heighten the risk of a fiscal crisis, CBO warned.

It could also make the US fiscal position more vulnerable to an increase in interest rates, and cause lawmakers to feel more constrained in their policy choices, it added.