(Washington) The US budget deficit has halved in 2022 compared to 2021 and after an all-time high two years ago due to the COVID-19 health crisis.
Posted at 10:36 a.m.
Updated at 10:58 a.m.
The deficit stood at $1.375 billion for the 2022 fiscal year ending in September, or $1.4 trillion less than last year, “the largest reduction in the federal deficit in American history”, announced the Treasury Department on Friday.
It now represents 5.5% of the Gross Domestic Product (GDP) of the world’s largest economy, compared to 12.3% last year.
“This is proof of our historic economic recovery, driven by our vaccination effort and President Biden’s support plan,” Treasury Secretary Janet Yellen said in a statement.
Revenues for the year, brought in by income taxes – by far the federal government’s main resource – and corporate taxes, reached a historic record of 4,896 billion dollars, up 21%, a said a Treasury official.
Spending fell $550 billion or 8.1% due to reduced COVID-19 related spending, including unemployment benefits and small business support.
They nevertheless amount to 6272 billion dollars, more than the budget forecasts envisaged, due to the rise in interest rates which increases the cost of the immense American debt and the measures of the Biden administration to reduce the burden of student loans.
On the federal borrowing side, US indebtedness increased by $2 trillion in 2022 to $24.3 trillion, or 97% of US GDP (from 98.4 in 2021).