Apr 10, 2024
US Budget Gap Hits $1.07 Trillion in First Half of Fiscal Year
, Bloomberg News
(Bloomberg) -- The US budget deficit widened in the six months through March as higher debt-servicing costs continued to be a key driver of the gap.
The deficit for the first half of the 2024 fiscal year reached $1.07 trillion. Adjusted for calendar differences, the gap was 4% greater than the one recorded in the same period in the prior year, Treasury Department data released Wednesday showed.
The deficit for the month of March was $236 billion, a smaller gap than the same month last year. That was partly due to a large payment from the Federal Deposit Insurance Corporation in 2023 related to the failures of Silicon Valley Bank and Signature Bank.
The interest burden on outstanding US debt remained the biggest reason for the widening deficit. Interest costs in the first half of the fiscal year were $522 billion, a 36% jump from 2023.
The Federal Reserve’s aggressive interest-rate hiking campaign has made debt more expensive, increasing the burden for the US budget.
The weighted average interest rate on outstanding US interest-bearing government debt was 3.22% at the end of March — the highest since April 2010 and marking a roughly 65 basis point increase from a year before.
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