US economy expected to grow 4.6% in 2021: Budget Office

By Ovunc Kutlu

ANKARA (AA) - The American economy is estimated to grow by 4.6% this year, the Congressional Budget Office (CBO) said in a report released Monday.

After contracting a record 3.5% in 2020, the worst annual decline in US history since 1946, gross domestic product (GDP) is later expected to increase by 2.9% next year.

With more than 10 million jobless Americans, unemployment continues to cause weak economic activity and consumption, but it is forecast to decline from 6.8% last year to 5.3% this year, and later to reach 4.9% in 2022.

"The coronavirus pandemic caused severe economic disruptions last year," nonpartisan CBO said in its report titled An Overview of the Economic Outlook: 2021 to 2031.

"Over the course of the coming year, vaccination is expected to greatly reduce the number of new cases of COVID-19, the disease caused by the coronavirus. As a result, the extent of social distancing is expected to decline," it added.

Consumption, which has remained weak due to the pandemic, is anticipated to increase with consumer price index estimated to rise from 1.2% last year to 1.9% this year and 2.2% in 2022.

The CBO's positive outlook can weaken President Joe Biden's position on his $1.9 trillion relief plan that faces opposition from some of the Republicans.

After two weeks in the White House, the Congress has not yet made a move on the plan despite Biden urging lawmakers to do so.