February 2, 2021
CBO releases updated economic outlook
On February 1, 2021, the Congressional Budget Office (CBO) released a report, An Overview of the Economic Outlook: 2021 to 2031, an updated economic outlook for the US economy.
The CBO expects the economic expansion that began in mid-2020 to continue, as it expects vaccinations to greatly reduce the number of new COVID-19 cases and reduce social distancing. According to the report, the CBO "projects a stronger economy than it did in July 2020, in large part because the downturn was not as severe as expected and because the first stage of the recovery took place sooner and was stronger than expected."
The CBO projections assume that taxes and spending under current law will remain in place and do not reflect the impacts of any additional COVID relief that Congress might enact.
Shifts in the economic outlook can significantly affect the federal government's fiscal outlook, impacting the trajectory of federal spending and revenue, the federal deficit and federal debt. The CBO expects to release updated estimates for the federal government's fiscal outlook (spending, revenues, deficits and debt) in mid-February. Companies and industry groups need to pay careful attention to the fiscal outlook as it can significantly influence the policy agenda.
Source: Congressional Budget Office, An Update to the Economic Outlook: 2021 to 2031, February 1, 2021.