The U.S. federal budget deficit is now projected to be a bit wider this year than was predicted four months ago due to weaker-than-anticipated economic growth during the first half of the year. The weaker growth translated into softer tax collections according to the nonpartisan Congressional Budget Office. The projected shortfall for the current federal fiscal year, which ends on at the end of this month, is now $506 billion compared with an April prediction of $492 billion.
The projected shortfall represents approximately 2.9 percent of gross domestic product, the smaller share of the economy since 2007. Last year, the budget deficit was $680 billion, or 4.1 percent of gross domestic product. During the first 10 months of the current fiscal year, the U.S. budget deficit was 24 percent less than it was during the same period one year prior. Revenue over that period expanded 8 percent compared to a year earlier while spending was up 1.2 percent.
As reported by Bloomberg, the 2015 deficit is expected to be in the range of $470 billion, which would amount to about 2.6 percent of gross domestic product. In other words, the annual budget deficit is expected to continue to decline as a share of overall economic output.
