A huge U.S. fiscal deficit from the first two years of COVID-19 spending should decline rapidly to near pre-pandemic levels, largely due to a rebound in economic growth, analysts at Morgan Stanley said on Thursday. In a research note, the investment bank’s economists predicted the debt-to-gross domestic product ratio should decline 7 percentage points in 2022, after reaching the highest level since World War Two during the pandemic. Real growth will contribute about 6 percentage points and inflation a similar percentage, offset by interest expenses and primary deficit spending. “Our expectation for fiscal spending in 2022 and 2023 are much more moderate, especially after the failure of the large-scale Build Back Better spending program to pass last year. For 2022, we expect a deficit of 4.1%, and 4.0% for 2023, closely in line with the pre-Covid decade average,” the note said. The economists said interest rate levels and net interest …