US budget deficit soars to $2.77T, 2nd highest on record

ANKARA

The US' budget deficit soared to $2.77 trillion for the 2021 fiscal year, marking its second highest level on record after $3.13 trillion in 2020, according to a joint report on Friday.

The deficit for the budget year from Oct. 1, 2020 through Sept. 30, 2021 came in $360 billion less than the previous year, as US economic recovery increased revenues against record government spending posted in 2020 during the pandemic.

Although government spending rose 4.1% to $6.82 trillion during 2021 fiscal year, government revenues increased by 18.3% to almost $4.05 trillion, according to the report by the Department of Treasury and the Office of Management and Budget.

While the budget deficit for 2020 fiscal year was 15% of gross domestic product (GDP), this ratio fell to 12.4% for 2021 fiscal year.

"Under President [Joe] Biden’s leadership, the US economy is getting back on track and Americans are getting back to work," the Treasury Department said in a statement.

"Today’s joint budget statement is further evidence that America’s economy is in the midst of a recovery," Treasury Secretary Janet Yellen said in the statement. "While the nation’s economic recovery is stronger than those of other wealthy nations, it is still fragile."

The Congressional Budget Office estimates budget deficit falling to $1.15 trillion or the 2021 fiscal year, and dive below $1 trillion from 2023 through 2025.