US budget deficit halves in 2022

It stood at 1,375 billion dollars for the 2022 fiscal year ending in September, or 1,400 billion less than last year.

The US budget deficit halved in 2022 compared to 2021 and after a historic high two years ago due to the Covid-19 health crisis.

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 against 12.3% last year.

“This is proof of our historic economic recovery, driven by our vaccine effort and President Biden’s support plan,” Treasury Secretary Janet Yellen said in a statement.

Historic record for tax revenue

Revenues for the year, reduced 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 by 550 billion or 8.1% due to the reduction in expenditure linked to Covid-19, in particular unemployment benefits and aid for small businesses.

They nevertheless amount to 6.272 billion dollars, more than the costly expenditure 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, the indebtedness of the United States increased by 2,000 billion dollars in 2022 to amount to 24,300 billion dollars, or 97% of American GDP (compared to 98.4 in 2021).

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