US Fiscal Year Deficit Exceeds $1 Trillion in 5 Months

Monthly Fiscal Deficit Trends in the United States

[Asia Economy Reporter Byunghee Park] According to Bloomberg News on the 10th (local time), the United States' fiscal deficit for the current fiscal year (October 2020 to September 2021) has exceeded $1 trillion in just five months.

According to a report released by the U.S. Treasury Department on the same day, the U.S. fiscal deficit for February was $310.9 billion, a 32.1% increase compared to $235.3 billion in February last year.

The cumulative fiscal deficit for the current fiscal year, which began last October, has grown to $1.05 trillion. Bloomberg explained that this is the largest cumulative fiscal deficit for the first five months of a fiscal year in history. The fiscal deficit for the same period in the previous fiscal year was $62.45 billion.

The sharp increase in the fiscal deficit is due to the government continuing to spend to prevent an economic recession caused by COVID-19. The U.S. government implemented a $900 billion stimulus package in December last year.

President Joe Biden, who took office on January 20, proposed an additional $1.9 trillion stimulus package, and the bill passed the House on the 10th after passing the Senate. President Biden is expected to sign the bill on the 12th. Accordingly, the U.S. government's fiscal deficit is expected to increase significantly in the future.

The Congressional Budget Office estimated that President Biden's stimulus package would increase the fiscal deficit by an additional $1.16 trillion in the current fiscal year and impose a burden of $528.5 billion in the next fiscal year. Furthermore, it predicted that the fiscal deficit-to-GDP ratio for this fiscal year would be the highest since World War II.

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