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

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

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

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

Outlays in July were $626 billion, up from $371 billion a year earlier and down from about $1.1 trillion in June. A Treasury official said the higher figure for June was due to about $511 billion in costs recognized 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 $563 billion as a result of payment of non-withheld taxes due on July 15, a deadline that was delayed from the traditional April 15 deadline due to the coronavirus epidemic.

Receipts for the fiscal 2020 year-to-date period were $2.82 trillion, down slightly from $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.