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US July deficit falls to US$63 billion on delayed tax payments

US July deficit falls to US$63 billion on delayed tax payments

FILE PHOTO: A U.S. five dollar note is seen in this illustration photo June 1, 2017. REUTERS/Thomas White/Illustration

WASHINGTON: The US federal budget deficit fell to US$63 billion in July, half the amount of a year earlier and down from US$864 billion in June, as a delayed Jul 15 tax payment deadline boosted revenues and coronavirus aid outlays shrank sharply, the US Treasury said on Wednesday (Aug 12).

The July deficit brought the fiscal year-to-date deficit to US$2.81 trillion, compared to US$867 billion for the comparable period of 2019 and doubling the 2009 full-year record deficit of US$1.4 trillion.

The budget deficit for July was smaller than the US$193 billion deficit forecast by analysts in a Reuters poll. But many analysts still anticipate a full-year deficit approaching US$4 trillion. The fiscal year ends Sept. 30.

Outlays in July were US$626 billion, up from US$371 billion a year earlier and down from about US$1.1 trillion in June. A Treasury official said the higher figure for June was due to about US$511 billion in costs recognised for disbursement of small business loans under the Paycheck Protection Program that were sharply lower in July.

Receipts for July more than doubled from a year earlier to US$563 billion as a result of payment of non-withheld taxes due on Jul 15, a deadline that was delayed from the traditional Apr 15 deadline due to the coronavirus epidemic.

Receipts for the fiscal 2020 year-to-date period were US$2.82 trillion, down slightly from US$2.86 trillion in the year-earlier period. A Treasury official said this was because of stronger revenues early in the year, coupled with income replacement aid, including PPP loans that kept employees on payrolls and supplemental unemployment benefits that were subject to tax withholding.

Source: Reuters

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