Deficit relative to economy will rise in 2016, first time since 2009: CBO

The U.S. deficit relative to the economy will rise in relation to the size of the economy this year, the Congressional Budget Office said Tuesday.

This year will mark the first such increase since 2009, CBO also said.

The non-partisan CBO said the fiscal 2016 deficit will swell to $544 billion, or 2.9 percent of U.S. economic output, from $439 billion in fiscal 2015. The deficit peaked at about $1.4 trillion in 2009 during the deepest recession since the 1930s.

"The deficit projected by CBO would increase debt held by the public to 76 percent of GDP by the end of 2016," according to CBO.

CBO also said it forecast U.S. real gross domestic product growth this calendar year at 2.7 percent, slowing to 2.5 percent in 2017 and then an average of 2.0 percent between 2018 and 2020.

"If current laws generally remained unchanged, the deficit would grow over the next 10 years, and by 2026 it will be considerably larger than its average over the past 50 years."

Over the coming decade, CBO predicts deficits totaling $9.4 trillion. That's up $1.5 trillion from its August estimate, with much of the increase mostly due to last month's tax legislation, which permanently extended several tax cuts that Congress had typically renewed temporarily.

— Reuters and The Associated Press contributed to this report.