The U.S. budget deficit increased by 12% and approached $2 trillion

The U.S. federal budget deficit for fiscal year 2026, which ended in September, widened to $1.99 trillion. That is 12% higher than a year earlier, according to data from the U.S. Department of the Treasury released on Friday. Federal budget spending rose by more than 5% to $7.4 trillion, while revenue increased by about 3% to $5.4 trillion.

Finance Minister Scott Bessent cited duty refunds as one of the key reasons for the growing deficit, according to Bloomberg. The refunds stem from a February ruling by the U.S. Supreme Court, which invalidated most of the import duties imposed by President Donald Trump in April 2025. Bessent had previously stated that the deficit would be reduced by the end of fiscal year 2025.

The budget deficit has remained at around $2 trillion for the fourth consecutive year, Bloomberg notes. The data indicates that the deficit amounted to about 6% of GDP: this is an unusually high level for a period of relatively low unemployment, the agency states. Officially, the deficit narrowed in fiscal year 2025, but this was due to an accounting measure: a tax law passed by Republicans in 2025 tightened limits on student loans, and the Treasury Department accounted for this effect as a reduction in spending in 2025, Bloomberg added.

In August, U.S. national debt exceeded $40 trillion for the first time. The Congressional Budget Office projected that by 2035, the federal budget deficit could rise to $2.7 trillion.

This article was AI-translated and verified by a human editor