US budget deficit may peak since World War II
US, WASHINGTON (ORDO NEWS) — As the United States spends trillions of dollars fighting coronavirus and its consequences, the annual budget deficit relative to the size of the American economy can reach its maximum level since World War II, MarketWatch writes.
Last weekend, US President Donald Trump signed into law on financial support for the economy in the amount of $ 2.2 trillion. He and the leaders of the US Congress are talking about another large package of measures to stimulate the economy.
Even before the COVID-19 pandemic, the United States expected that in fiscal 2020, which began on October 1, 2019 and ended on September 30, 2020, the deficit would be just over $ 1 trillion for the first time since 2012, recent government estimates show.
According to a new Morgan Stanley study, the deficit will be at least $ 3.7 trillion in calendar year 2020 and another $ 3 trillion in calendar year 2021.
In general, the budget deficit in the next two years could lead to the fact that public debt will grow to about $ 29 trillion from the estimated $ 23.6 trillion at present. Earlier, the United States did not expect this mark to be reached until 2025.
The federal budget deficit in the current fiscal year is expected to exceed the post-war record of 9.8% of GDP achieved in fiscal 2009. Assuming that the US economy shrinks in the current fiscal year, the budget deficit in relation to the size of the economy may even approach 15-20%. The last time such indicators were observed in the United States during World War II.
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