Spending more than revenue, borrowing more, budget deficit equivalent to 6.4% of GDP

The US Treasury Department released a report on October 18 stating that the budget deficit of the world's largest economy has reached 1,833 billion USD in fiscal year 2024, an increase of 8% compared to the deficit in 2023 (1,695 billion USD) due to higher spending, including interest payments on public debt.

In fiscal 2024, the US economy will spend more than $1 trillion on interest payments for the first time, due to high interest rates and more debt. (Source: Bloomberg)

The main reason was a 29% increase in interest payments to $1.133 trillion, due to higher interest rates and more U.S. debt. Last fiscal year was also the first time the U.S. government spent more than $1 trillion on interest payments. That was more than the cost of elderly care and defense spending.

Accordingly, the total deficit has increased by 138 billion USD in fiscal year 2024 - calculated from October 1, 2023 to September 30, 2024. Notably, public debt remains the main concern of American voters ahead of the presidential election in November.

The fiscal 2024 budget deficit is equivalent to 6.4% of GDP, up from 6.2% the previous year. According to the US Treasury Department, fiscal 2024 marks the third highest deficit in the history of the "Land of the Stars and Stripes", after only 2021 and 2020.

Other factors that pushed up the US budget deficit were a 7% increase in social security spending to $1.52 trillion, a 4% increase in Medicare spending to $1.05 trillion, and a 6% increase in military spending to $826 billion.

Meanwhile, the increase in budget revenue in the last fiscal year was mainly due to increased personal and corporate income taxes, along with some other areas.

Sharing with the press when announcing the latest budget figures, US Treasury Secretary Janet Yellen emphasized that the world's largest economy has maintained its recovery momentum in 2024.

Meanwhile, the US Treasury Department confirmed that the budget deficit in fiscal year 2024 is $76 billion lower than the estimate announced in March.

As a percentage of Gross Domestic Product (GDP), the US budget deficit is 6.4%, higher than the 6.2% figure for fiscal year 2023.

Source: https://baoquocte.vn/kinh-te-my-chi-nhieu-hon-thu-vay-no-nhieu-hon-tham-hut-ngan-sach-tuong-duong-64-gdp-290612.html