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The coronavirus will cost the economy nearly $8 trillion, Congressional Budget Office says

The coronavirus will cost the economy nearly $8 trillion, Congressional Budget Office says

by Jeff Cox, CNBC  |  Published on June 2, 2020

The coronavirus likely will sap about $7.9 trillion of economic activity over the next decade-plus even with all of the rescue funding being poured in to offset the pandemic’s impact, according to a government estimate Monday.

Through fiscal 2030, the virus will reduce real economic output — nominal GDP adjusted for inflation — by 3% from initial economic estimates in January before the pandemic hit, the Congressional Budget Office said.

“Business closures and social distancing measures are expected to curtail consumer spending, while the recent drop in energy prices is projected to severely reduce U.S. investment in the energy sector,” CBO Director Phillip L. Swagel said in a written response to an inquiry from Sen. Chuck Schumer, D-N.Y. “Recent legislation will, in CBO’s assessment, partially mitigate the deterioration in economic conditions.”

Nominal GDP is expected to be $15.7 trillion, or 5.3%, less than originally forecast due to the coronavirus.

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