A person runs in front of the US Capitol during the morning hours in Washington, February 10, 2022.
Brendan McDermid | Reuters
US economic growth will exceed 3% in 2022, while hyperinflation has peaked and will calm each month to about 2% by 2024, according to government projections published Wednesday.
The nonpartisan Congressional Budget Office estimated that real gross domestic product, or gross domestic product, will grow 3.1% in 2022, driven by consumer spending and demand for services, according to the report released Wednesday.
It revised its estimates of GDP growth in 2023 and 2024 upwards to 2.2% and 1.5%, respectively, but still below the pace this year.
“In the forecasts of the Central Bank of Oman, the current economic expansion will continue, and economic output will grow rapidly over the next year,” the CBO said in its report. “To meet the increasing demand for goods and services, companies are increasing investment and hiring, although supply disruptions are hampering this growth in 2022.”
Here is what the Central Bank of Oman sees for the US economy at the end of each year:
- Real GDP: 3.1% in 2022, 2.2% in 2023, and 1.5% in 2024.
- Inflation (measured by the Consumer Price Index): 4.7% in 2022, 2.7% in 2023, and 2.3% in 2024.
- Unemployment rate: 3.7% in 2022, 3.6% in 2023 and 3.8% in 2024.
- Federal funds rate: 1.9% in 2022, 2.6% in 2023.
The upbeat tone of the report appears to include an implicit prediction that the Federal Reserve, the country’s central bank responsible for managing inflation, will be able to raise interest rates through 2022 and 2023 without pushing the US economy into recession.
While the CBO expects inflation to remain well above the Fed’s 2% target throughout 2022 and 2023, it also said the pace of price increases is likely not to rise above current levels.
Growth in the core PCE price index, the metric the central bank prefers to use to measure inflation, increased from 1.4% in 2020 to 4.6% in 2021. The CBO estimates that the number should recede to 3.8% in 2022 due to the impact Continuous rising home and rent costs.
The Central Bank of Oman believes that, to counter inflation, the Fed will raise the benchmark interest rate to 1.9% by the end of 2022, well below market expectations of the 2.5% figure north.