The United States of America the world’s largest economy has reached the record high $779 billion annual budget deficit during the financial year ending September 30. The budget deficit is a record high since 2012 and increased by $113 billion from the previous year, the U.S. Treasury announced on Monday.
According to the details, the budget deficit is equal to 3.9 percent of GDP, which is increased from 3.5 percent during 2017.
The Treasury further informed that receipts increased slightly due to higher tax payments especially from individuals which were offset by “lower net corporation income tax receipts”.
U.S. debt servicing costs also increased which pushed outlays to $127 billion. The government’s total borrowing is increased by $1 trillion during the current fiscal year to $15.75 trillion which includes $779 billion to finance the budget deficit.
The government has also seen increased interest expense on government debt by 14 percent to $65 billion because of higher level debt and increasing interest rates, the treasury told reporters.
According to Steven Mnuchin, Secretary Treasury, “going forward with the president’s economic policies that have streamlined strong economic growth, coupled with cutting down unnecessary spending will take America towards sustainable growth in future.”
The government has increased military spending by $32 billion while spending on education plunged by $48 billion which is a 43% cut.