Key Takeaways
- President Donald Trump disputed the Congressional Budget Office’s 1.8% estimate for annual economic growth over the next decade, predicting the U.S. economy could as much as quintuple that growth rate.
- If GDP reached 9% economic growth, it would be the fastest expansion since 1943. Professional forecasters give this about a 0% chance of happening.
- The growth projections have implications for the Republicans’ spending bill now being considered in the Senate. Higher growth would mean more room for tax cuts and spending, and smaller federal budget deficits.
Is the economy on track to have its fastest growth since 1943? President Donald Trump thinks it could be, but professional forecasters say there’s no chance.
Trump made his bold economic prediction on Friday in a social media post. In it, he disputed the Congressional Budget Office’s projection for the inflation-adjusted Gross Domestic Product (GDP) to grow at an annual rate averaging 1.8% over the next decade. Trump said the economy could as much as quintuple the CBO’s estimated growth rate.
Why Is the CBO’s Estimate Important?
The CBO’s growth-rate predictions are significant to Trump’s public policy priorities.
The CBO is tasked with providing budget and economic information to Congress so its members can make informed voting decisions. And the Republican budget bill passed by the House of Representatives needs a fast-growing economy to balance two of Trump’s major fiscal priorities—cutting taxes while decreasing the deficit. The higher the economic growth, the more tax revenue the government will collect and the smaller spending deficits will be.
The nonpartisan budget research group estimated the Republican bill will increase spending deficits by $3.8 trillion through 2034 if average growth is 1.8% each year. Trump said those estimates are too pessimistic and accused the research group of being biased against him.
“The Democrat inspired and ‘controlled’ Congressional Budget Office (CBO) purposefully gave us an EXTREMELY LOW level of Growth, 1.8% over 10 years,” Trump posted on social media. “I predict we will do 3, 4, or even 5 times the amount they purposefully ‘allotted’ to us (1.8%) and, with just our minimum expected 3% Growth, we will more than offset our Tax Cuts (which will, in actuality, cost us no money!)”
Trump Is Predicting Historic Growth
Five times the CBO’s estimated 1.8% growth rate would be 9%. Growth at this level would be a historic economic boom. GDP has grown at an average rate of 2.5% a year since 1990, according to the Bureau of Economic Analysis.
GDP growth has surged several times to rebound from recessions. The most dramatic example was during World War II, when the economy grew at double-digit rates: 1943 was the last year the GDP grew at a rate of 9% or more. The best year for GDP growth in recent times was 2021, when the economy grew 6.1% as it bounced back from the pandemic crash.
Few if any professional economists see 9% economic growth in the cards any time soon.
The Federal Reserve Bank of Philadelphia surveyed professional forecasters earlier in May and found the median forecast for growth in 2025 was 1.4%, more pessimistic than the CBO projected for the year, and 2% in 2028.
Federal Reserve Bank of Philadelphia
The forecasters gave zero probability of 9% economic growth in 2025 or any year through 2028. The GDP is headed the wrong direction in 2025 so far, shrinking at a rate of 0.2% annually in the first quarter.
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