The Congressional Budget Office on Thursday lifted its forecasts for economic growth, inflation, and federal budget deficits this year, following the $1.9 trillion covid-19 relief package enacted in March.

Beyond 2021, however, the agency sees smaller deficits as a recovering economy boosts federal revenues. Forecasts for the federal debt are also a little lower than in the February report. The federal debt will increase to 103% of the economy at the end of 2021.

The agency expected real gross domestic product growth of 7.4% in the fourth quarter of 2021 compared with a year earlier, up from the 3.7% projected in February, when the CBO last issued updated projections on the federal budget and US economy.

The agency also sees inflation increasing by 2.8% in the fourth quarter from the previous year, before slowing to 2% in 2022, as measured by the personal consumption expenditures price index. In February, before the passing of the stimulus bill, the agency saw inflation increasing by 1.7% this year.