Budget deficit widens to $1.9 trillion as US nears end of current fiscal year
With one month left in the current fiscal year, the U.S. federal budget deficit soared in August, with rising interest costs continuing to put pressure on the overall balance of payments. The size of the deficit reached $1.9 trillion in the 11 months through August, widening 24 per cent year-on-year, according to data released Thursday by the US Treasury Department.The one-month deficit in August was $380 billion, compared with a surplus in August 2023 adjusted for calendar differences. A large part of the one-month difference is due to the dismissal of student loan relief. The interest burden on the U.S. debt balance continues to be a major drag on the budget. Interest costs for the first 11 months of the current fiscal year total $1.05 trillion, a 30% increase over 2023. Prior to this, annual interest costs have never exceeded $1 trillion, although Treasury officials note that interest costs were higher in the early 1990s in terms of interest costs as a percentage of gross domestic product (GDP).
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