US Congressional Budget Office “Debt Limit” Warning

CBO has released the “Federal Debt and Legal Limit” report and the “Budget and Economic Outlook: 2023-2033” report.

The federal debt report recalled that the debt limit was increased by $2.5 trillion on December 16, 2021 to a total of $31.4 trillion, but the debt limit was reached on January 19.

The report states that the US Treasury Department has implemented “extraordinary measures” and adds: “The Congressional Budget Office estimates that if the debt limit remains unchanged, the borrowing capacity of the government using extraordinary measures It will be sold out between July and September.” expression was used.

The report says it is unclear when the government’s borrowing capacity will be exhausted, saying this is due to the possibility that the timing and amount of revenue and expenditure collection in intervening months differs from estimates. of the CBO. .

The report warned that in April, when annual US income tax returns are filed, the government’s borrowing capacity could be exhausted before July if income tax collections fall short of estimates.

“Unless the debt limit is increased or suspended before emergency measures are exhausted, the government cannot service its debt in full,” the CBO report said. As a result, the government is forced to delay payment for some activities, default, or both.” the evaluation was done.

THE US ECONOMY IS EXPECTED TO GROW 0.3 PERCENT THIS YEAR

Separately, in the report on the budget and economic outlook, it was reported that the federal government’s budget deficit is estimated to rise to $1.4 trillion this year, from $1.37 trillion in 2022.

In the report, which states that the budget deficit is expected to rise in the coming years, it is stated that the deficit is projected to reach $2.7 trillion by 2033.

In the report, it was noted that the ratio between public debt and gross domestic product (GDP) is expected to be 98% this year, and this ratio is estimated to rise to 118% in 2033.

In addition, the US economy, which is claimed to have grown 2.1% in 2022, is reportedly expected to grow 0.3% in 2023, 1.8% in 2024, and 2.7 % in 2025.

In the report, it was noted that the average unemployment rate in the country is expected to be 4.7 percent this year, 4.9 percent next year and 4.7 percent in 2025.

In the CBO report, it was noted that inflation is projected to be 4.8 percent in 2023, 3 percent in 2024 and 2.2 percent in 2025. (BRITISH AUTOMOBILE CLUB)