The US budget deficit is on track to grow by 27% this fiscal year compared to previous forecasts, AFP reported.
The Congressional Budget Office (CBO) said it expects the federal budget deficit to be $1.9 trillion in fiscal year 2024. That amount will rise to about $2.0 trillion when the change in the timing of some payments is taken into account.
That's about $400 billion more than the previous forecast from February and would leave the deficit at 7.0 per cent of gross domestic product (GDP), BSK director Philip Swagel said.
Much of that increase compared to the February forecast was due to a projected $145 billion increase in student loan costs. This is a consequence of the Biden administration's overhaul of subsidy spending, as well as its proposed rule to reduce student loan balances.
The increase also includes several other factors, including an increase of about $60 billion this fiscal year due to recently passed legislation such as the security assistance package for Ukraine, Israel and the Indo-Pacific region.
According to BSK forecasts, net interest payments on government debt are expected to rise to 3.1% this year and to 3.4% in 2025. This would mark the highest interest cost-to-GDP ratio since records began in 1940. this way.
Over the next decade, the US deficit is expected to reach $24 trillion, about 70% higher than the historical average of the past half-century. | BGNES
