A new Congressional Budget Office report forecasts the federal budget deficit to hit $534 billion in fiscal year 2016, about $100 billion higher than the agency’s shortfall estimates in the previous fiscal year.
CBO said in the March 2016 report that it predicts public debt to reach 86 percent of gross domestic product by 2026 due to the increase in the federal deficit.
The agency also predicts that increases in interest on federal debt and spending on Medicare and Social Security programs will outpace revenue growth over the next decade.
The budget shortfall will rise from 2.8 percent of GDP in 2016 to 4.9 percent of GDP by 2026, CBO added.
CBO noted that its shortfall projection for fiscal 2016 is about $10 billion lower than its estimates in January.
The agency also reduced its 10-year cumulative deficit forecast to $9.3 trillion between 2017 and 2026, a $95 billion drop from its estimated deficits in January.
CBO said it expects federal revenues and outlays to reach $3.4 trillion and $3.9 trillion, respectively, in 2016.