The White House cut its forecasts for economic growth and interest rates, resulting in slight reductions in projected deficits over the coming decade.
The new estimates were published Friday in the White House budget office’s “Mid-Session Review,” which updates the economic and fiscal projections made in the president’s February budget presentation to Congress.
The White House now forecasts that gross domestic product will rise 1.9% this year and 2.5% in 2017, down from estimates of 2.6% for both years in its February forecast. It reduced long-run growth forecasts, for years after 2018, to 2.2% from 2.3%.
Gross domestic product grew at a seasonally adjusted annual rate of 1.1% in the first quarter, the weakest pace in a year, due largely to a slowdown in business investment.
How many recovery summers have we had now?
2.5% in 2017 isn’t bad, but 1.9% for this year really isn’t healthy. That’s been the ongoing problem during the Obama era: the growth barely chugs along. It has good moments, but it doesn’t string together enough of them. We may have stepped away from the brink of the financial oblivion cliff we faced in 2008-09, but we aren’t moving very rapidly in the other direction.
There’s no real reason to think the 2017 projection will hold either. Business investors may start burying their cash in their yards depending on what happens in November.