The US budget deficit hit USD 779 billion in the fiscal year ending September 30, the highest since 2012 and USD 113 billion more than in the prior year, the Treasury announced Monday.
The deficit is equivalent to 3.9 per cent of GDP, up from 3.5 per cent in the 2017 fiscal year, according to the report.
Receipts increased slightly, in part due to higher tax payments, especially from individuals, which were offset by “lower net corporation income tax receipts,” Treasury said in a statement.
Outlays rose USD 127 billion, with the biggest increase from the Treasury Department, largely due to debt servicing costs.
Total government borrowing increased by USD 1 trillion in the latest fiscal year to USD 15.75 trillion, including USD 779 billion to finance the deficit.
Interest expenses on government debt increased 14 per cent or USD 65 billion due to the higher debt level as well as rising interest rates, a Treasury official told reporters.
“Going forward the President’s economic policies that have stimulated strong economic growth, combined with proposals to cut wasteful spending, will lead America toward a sustainable financial path,” Treasury Secretary Steven Mnuchin said in a statement.
Military spending rose USD 32 billion while education spending dropped USD 48 billion, a 43 per cent reduction.