(MENAFN) The U.S. budget deficit for the last fiscal year reached $1.8 trillion, exceeding 2023 levels mainly due to increased government spending and higher interest payments on debt. The Treasury Department reported a $138 billion rise in the deficit, highlighting ongoing financial issues. With the 2024 presidential election approaching, the national debt is a key concern for voters.
This year’s deficit is the third-largest in U.S. history, after the peaks of 2020 and 2021 during the pandemic. Much of the recent spending increase is due to a 30% rise in interest payments linked to higher interest rates, making debt servicing more costly and straining the federal budget.
Despite these challenges, the government also saw a significant rise in revenue, largely from increased individual income and corporate taxes, which helped reduce some of the deficit. This indicates that while spending rose, the U.S. economy’s strength contributed positively to finances, according to the Treasury.
Treasury Secretary Janet Yellen noted the continued resilience of the economy despite these fiscal challenges, stating that the final deficit for 2024 was about $76 billion lower than earlier estimates. However, the deficit-to-GDP ratio slightly increased to 6.4% from 6.2% in 2023, reflecting ongoing pressures in managing economic growth and debt.
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