U.S. GDP is projected to recover 10% by Q4 2021 from -12%, where it stands in Q2 2020, according to a newly updated report from the Congressional Budget Office (CBO). That would put GDP at 1.6% lower in the fourth quarter of 2021 than the fourth quarter of 2019, according to the report.
CBO released a 2021 projection outlook prior to the coronavirus outbreak but has since updated the projection to account for the virus and to incorporate available economic data (through May 12). Formal social distancing restrictions have loosened since April, but “the persistence of social distancing will keep economic activity and labor market conditions suppressed for some time,” states the report.
Many uncertain factors remain — including whether we will experience additional waves of the outbreak that could lead to implementing new social distancing restrictions — making projections for the future more subject to change than usual.