The epidemic will shrink US GDP by nearly US$8 trillion in the next decade

Fallout from the coronavirus pandemic will shrink the size of the US economy by roughly $8 trillion over the next decade, according to new projections released by the Congressional Budget Office on Monday.

In a letter to US lawmakers, the CBO said the US economy will grow by $7.9 trillion less from 2020 to 2030 than it had projected in January. That amounts to a 3 percent decline in US gross domestic product compared to its initial estimate.

The stark illustration of the pandemic's potential economic impact comes one week after White House officials confirmed they would not release their own updated projections this summer in their annual "mid-session" budget review.

The pandemic will hamper US economic growth by reducing the amount of consumer spending and closing numerous businesses, the CBO said. Part of the impact will be mitigated by the more than $2 trillion the federal government has already approved in emergency spending for households and businesses.

"Business closures and social distancing measures are expected to curtail consumer spending, while the recent drop in energy prices is projected to severely reduce US investment in the energy sector," said Phillip L. Swagel, the CBO director and former economic expert at the American Enterprise Institute, a center-right think tank.