The US economy could be $ 15.7 trillion smaller in the next decade if Congress does not mitigate the economic damage from the pandemic of coronavirusthe Congressional Office of Budgetary Affairs said Monday.
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The CBO, which had already released a report predicting serious economic damage in the next two years, expanded that forecast to show that the severity of the economic impact could reduce growth for much longer.
The new estimate indicates that during the period from 2020 to 2030, total GDP could be $ 15.7 trillion less than the CBO had projected just in January. That would equate to a loss of 5.3% of GDP in the next decade.After adjusting for inflation, the CBO said that lost output would total $ 7.9 trillion, a loss of 3% of GDP adjusted for inflation.
The CBO said it was a “significant reduction” in GDP as a result of the pandemic.
“Business closings and social distancing measures are expected to reduce consumer spending, while the recent drop in energy prices is forecast to significantly reduce US investment in the energy sector,” said Philip Swagel, director of the CBO, in a letter.
“Recent legislation, according to the CBO’s assessment, will partially mitigate the deterioration in economic conditions,” Swagel said in the letter to Senators Chuck Schumer and Bernie Sanders. Both had requested the information to pressure Republicans to follow the example of the House of Representatives and approve more financial aid.
“Last week we learned that more than 40 million Americans lost their jobs as a result of this terrible pandemicSchumer and Sanders said in a joint statement. “Today, the CBO informs us that if current trends continue, we will see a $ 16 trillion reduction in economic growth in the next decade.”
Schumer and Sanders said Republicans should stop blocking a bill to provide more aid, as 40 million workers have lost their jobs because of the containment measures that have brought down the economy.
“To avoid the risk of another Great Depression, the Senate must act with a great sense of urgency,” said Schumer and Sanders.
The CBO forecast that GDP, which fell at a rate of 5% in the first three months of the year, will drop to a rate of 37.7% in the April-June quarter, representing the largest quarterly decline of the have a record.
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