WASHINGTON (Reuters) – The U.S. government’s budget deficit will decline slightly to about $3 trillion in fiscal 2021 despite higher coronavirus aid spending, the Congressional Budget Office said on Thursday, citing a stronger rebound in economic growth and tax revenues compared to previous forecasts.
The CBO said in updated forecasts that it expects GDP growth to reach 7.4% in 2021, based on fourth-quarter comparisons, tapering off to 3.1% growth in 2022 and 1.1% growth in 2023.
The fiscal 2020 budget deficit hit a record $3.129 trillion due to coronavirus aid programs and a severe drop in economic activity after COVID-19 lockdowns.
(Reporting by David Lawder; Editing by Paul Simao)
