The US budget deficit halved in 2022 compared to 2021 and after an all-time high two years ago due to the COVID-19 health crisis.
The deficit was $1.375 billion for the 2022 fiscal year ending in September, or $1.4 trillion less than last year, “the largest federal deficit cut in American history,” the Treasury Department announced Friday.
It now accounts for 5.5% of the world’s largest economy’s GDP, up from 12.3% last year.
“This is evidence of our historic economic recovery, driven by our vaccine efforts and President Biden’s support plan,” Treasury Secretary Janet Yellen said in a statement.
Revenue for the year, brought in by income taxes — by far the main resource for the federal government — and corporate taxes, a Treasury official said, reached a historic record of $4,896 billion, up 21%.
Spending decreased by 550 billion, or 8.1%, due to lower spending related to COVID-19, including unemployment benefits and support for small businesses.
However, it comes to $6,272 billion, more than budget projections, due to higher interest rates adding to the massive cost of US debt and the Biden administration’s student loan relief measures.
On the federal borrowing front, US indebtedness increased by $2,000 billion in 2022 to $24,300 billion or 97% of US GDP (compared to 98.4 in 2021).
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