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The United States racked up a $744 billion budget deficit in the first half of fiscal 2020, up 8% from a year earlier, the Treasury said on Friday, ahead of an expected April spending explosion and withering of revenues amid the coronavirus pandemic.
The Treasury said the budget deficit for March totaled $119 billion, down 19% on slightly higher revenues and lower outlays altered by calendar shifts, but the data did not show significant effects from virus-prompted business shutdowns. The U.S. fiscal year started in October 2019.
Outlays from a $2.2 trillion rescue package passed on March 27 are only just beginning. Tax payments due on April 15 have been delayed until July 15.
"We will certainly see a significant impact to receipts in the April results," a U.S. Treasury official told reporters. "On outlays, there will be a significant impact as well, as some of the stimulus programs will have begun to be paid."
Oxford Economics said in a research note that the second-half deficit will likely double to $1.5 trillion, bringing the full-year gap to a record $2.2 trillion.
"If additional stimulus measures are passed, the deficit will be larger," they wrote.
About $283 billion in non-withheld individual income taxes were paid in April 2019, according to Treasury data. The filing and payment delay will likely reduce such receipts in April 2020, the Treasury official said.
Receipts for taxes withheld from worker paychecks, which totaled $114 billion in April 2019, are expected to be reduced by rising unemployment.
The $744 billion six-month deficit fell well short of the record $957 billion first-half budget gap in 2009, a period reflecting the worst months of the 2008-2009 financial crisis and the start of a deep recession.
The full-year 2009 deficit also was a record that still stands, at $1.41 trillion, with $1-trillion plus deficits following for the next three years.
International Monetary Fund Managing Director Kristalina Georgieva said on Thursday that the coronavirus pandemic had already caused a recession that will be deeper than 2009 - the worst since the 1930s Great Depression - with a partial rebound expected in 2021.
The Congressional Budget Office forecast in January, well before the extent of the coronavirus outbreak became apparent, that fiscal 2020 full-year deficit would hit $1.02 trillion after reaching $984 billion in fiscal 2019.
Receipts for the first six months of 2020 totaled $1.6 trillion, a first-half record that was up 6% from a year earlier, while outlays totaled $2.35 trillion, also a record that was 7% higher than a year ago.
In March, receipts totaled $237 billion, up 3% from a year earlier, while outlays fell 5% to $356 billion. But significant March benefit payments were pushed into February, reducing outlays by $51 billion.
Accounting for calendar effects, March had an adjusted deficit of $170 billion, compared with an adjusted deficit of $136 billion in March 2019. For the fiscal year, the adjusted deficit was $744 billion compared with $690 billion in the same period the previous year.