Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

The United States is the world's largest economy, ahead of China. After a decade of growth, the country’s GDP growth rate turned negative in the aftermath of the COVID-19 pandemic, exacerbated by rising inequalities and obsolete infrastructure. However, the economy recovered promptly, GDP growth rebouncing to an estimated 5.7% in 2021, driven by strong private consumption and investment and supported by highly accommodative monetary and fiscal policies. As tighter financial conditions negatively impacted demand, GDP growth slowed down to 1.6% in 2022, and is expected to further reduce to 1% in 2023 and 1.2% in 2024 (IMF).

Concerning public finances, the fiscal measures implemented to contain the effects of the COVID-19-induced crisis weighed heavily on the government budget, resulting in a deficit of -9.5% of GDP in 2021 (IMF). Despite some additional spending planned in the new infrastructure bill, the deficit decreased to -4% GDP in 2022, thanks to the phasing out of pandemic-related measures and resumed economic activity. The tightening of monetary policy is expected to contain the growth of general government fiscal deficit to -5.3% GDP in 2023 and -6% GDP in 2024 (IMF). The government’s debt-to-GDP ratio, already on an upward trend in recent years, increased consistently to finance spending conceded to support households and businesses, reaching 134.5% in 2020 (IMF). Fiscal tightening helped decreasing the debt burden to 122.1% GDP in 2022, and the IMF forecasts it to pick up to 122.9% GDP in 2023 and 126% GDP in 2024. The U.S., however, enjoys unmatched financing flexibility, being the issuer of the US dollar, the world's main reserve currency. Inflation rose sharply to reach 8.1% in 2022, amid high energy prices, persistent supply-chain disruptions, and labor shortages (IMF). The war in Ukraine exacerbated price increases for energy and food. The IMF forecasts inflation to move back towards the FED target of 2% (3.5% in 2023 and 2.2% in 2024), amid the relaxation of supply chain constraints and an adjustment in global energy prices. The 2023 budget focuses on deficit reduction, health, manufacturing, includes climate initiatives and allocates USD 44.9 billion for aid to Ukraine.

The first impact of the COVID-19 crisis was incredibly heavy on the U.S. labour market, with the unemployment rate skyrocketing to 8.1% in 2020 (IMF). The labour market, however, recovered quickly with unemployment falling to 3.7% in 2022 (IMF). However, due to the slowing economy, the IMF sees an increase in unemployment, with a forecast rate of 4.6% in 2023 and 5.4% in 2024. American citizens enjoy one of the highest GDP (PPP) per capita in the world, estimated at more than USD 75,000 in 2022 by the IMF. Nevertheless, inequalities are still significant, as they tend to be worsened by current public health policies (with rising numbers of people without health insurance). In 2021, the povery rate was 11.6%, with 37.9 million people in poverty, a level similar to 2020 (U.S. Census – latest data available).

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