CBO: US Deficit Could Only Reach 4% in Fiscal 2013

Yesterday, the CBO (Congressional Budget Office) published its Monthly Budget Review for August 2013. It shows that revenues have risen significantly in 2013 and deficit will be less than half as large as the shortfall in 2009, which was 10.1 percent of GDP.

 

More from CBO:

 

The federal government ran a budget deficit of roughly $750 billion for the first 11 months of fiscal year 2013, CBO estimates—a reduction of more than $400 billion from the shortfall recorded for the same period last year. Revenues have risen significantly, accounting for more than two-thirds of the decline in the deficit. The deficit for all of fiscal year 2013 is expected to be smaller than the 11-month figure, as revenues are likely to outpace outlays in September.

 

In this context, if September surplus is above last year at the same period ($75 billion), the annual deficit for fiscal 2013 could be close to the most recent CBO estimate which is $642 billion. Therefore, relative to the size of the economy, the deficit this year will reach almost 4% percent of GDP.