The United States national debt and deficit will grow slower than anticipated in the next thirty years, mainly as a result of lower interest rates and cuts in disaster spending, the US Congressional Budget Office (CBO) said on Tuesday. The national debt will climb to as much as 141% of the US economy in the observed time period, which is 11 percentage points less than the office expected. Meanwhile, the deficit is set to reach 2.4% of the gross domestic product (GDP), decreasing by 0.3 percentage points from the last year's projection.
The cuts in forecasts are mainly due to lower expected spending on disasters and emergencies, as well as lower social security spending. The main driver of the revised forecast, however, are the expected lower long-term interest rates.
Despite the cuts in expectations, the CBO warned that the national debt is still unsustainably high. "The prospect of such large deficits over many years, and the high rising debt that would result, poses substantial risks for the nation and presents policymakers with significant challenges," CBO pointed out.
