Federal deficit was nearly $24 billion in April and May, Finance Department says

The federal government posted a deficit of nearly $24 billion in the first two months of its fiscal year, a sharp drop from record spending a year earlier at the start of the COVID-19 pandemic.

The Department of Finance’s regular budget monitor shows the budget deficit in April and May was $23.8 billion, down from the $86.8 billion recorded in the same months in 2020.

The department’s report said the drop in spending was expected given improved conditions from last spring, when the economy suffered a historic slump, prompting the federal treasury to provide unprecedented emergency aid.

The Fiscal Monitor says the deficit now reflects ongoing economic challenges, including the effect of third-wave shutdowns and ongoing emergency aid spending set to end this fall.

Program spending, excluding net actuarial losses, was nearly $76.9 billion in April and May, down about $37 billion, or down $32.5 billion. %, compared to $113.8 billion in the same period a year earlier.

Revenue reached more than $59.5 billion in April and May, up $27.1 billion, or 83.6%, year-over-year from $32.4 billion dollars from the previous year.

The Fiscal Monitor says the result was largely due to the sharp decline in tax revenues at the start of the pandemic as large parts of the economy were shut down.

Public debt charges rose $300 million, or 9.1%, to $3.9 billion from nearly $3.6 billion in the prior year.

The Department of Finance says the change is due to higher inflation adjustments on real return bonds, partly offset by lower interest on treasury bills and government pension and welfare bonds. ‘social advantages.

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