The Congressional Budget Office (CBO) released a report today with economic projections for the next three years, indicating that U.S. President Donald Trump’s policies will reduce overall growth in 2025 before improving thereafter.
The latest figures, comparing changes in the fourth quarter, show that unemployment, inflation, and overall growth rates are expected to worsen in 2025.
The CBO anticipates that the real Gross Domestic Product (GDP) growth will decrease from 2.5% in 2024 to 1.4% this year due to new tariffs that increase prices of consumer goods and services, affecting household purchasing power.
“Tariffs also raise costs for companies using imported inputs and competitors in production,” the report adds.
The GDP is projected to grow to 2.2% in 2026, stabilizing at 1.8% in 2027 and 2028, according to the document.
Unemployment is expected to reach 4.5% in 2025, higher than the initially anticipated 4.3%.
In 2026, the unemployment rate is projected to reach 4.2%, slightly below the initially forecasted 4.4% at the beginning of the year.
Inflation is expected to reach 3.1% throughout 2025, above the January projection of 2.2%, but may fall to 2.4% next year.
The report shows that Donald Trump’s choices have hindered short-term growth, and the measures have yet to demonstrate the promised job increases and budget deficit reductions.
The CBO does not foresee economic crises or recessions, highlighting that estimates will return to the expected average over time.
White House spokesperson Kush Desai told the Associated Press that “Americans heard similar pessimistic forecasts during President Trump’s first term when the president’s economic agenda triggered historic growth in jobs, wages, and the economy, along with the first decline in wealth inequality in decades.”
Kush Desai also noted that the president’s policies should yield results and prove analysts wrong.
