Congressional Budget Office Revises Economic Forecast Downward

Director warns that projections are ‘inherently uncertain’

The Congressional Budget Office is revising downward its forecast of the country's economic growth for 2018. CBO Director Keith Hall, pictured, warns, though, that such projections are "inherently uncertain." (Bill Clark/CQ Roll Call file photo)

The Congressional Budget Office projects the economy to grow at a rate of 3.1 percent in 2018, a slight revision to the 3.3 percent growth rate the agency forecast in April.

The CBO attributed the slight decline in its gross domestic product estimate this year to revised projections of discretionary spending and interest rates.

CBO Director Keith Hall added a caveat to the projections, though, about the forecast, specifically noting the uncertainty surrounding U.S. trade policy, particularly on tariffs.

“Economic projections are inherently uncertain. For example, when CBO completed this economic forecast in early July, the agency estimated that the macroeconomic consequences of the U.S. tariffs and foreign retaliatory tariffs that had been implemented at that time would be small. The new tariffs that were then in place affected goods that accounted for less than 1.5 percent of the total value of U.S. trade. However, trade policy has already changed since early July and may continue to evolve, so the effects of new tariffs may become more substantial and have a larger effect on the economy than CBO accounted for in its current projections,” Hall said in a statement. 

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