U.S. Fiscal Deficit in 2025 Draws Widespread Attention
According to the latest report from the Congressional Budget Office (CBO), the U.S. fiscal deficit for the current fiscal year is projected to reach $1.865 trillion, accounting for 6.2% of GDP. This figure marks the highest level in the past decade, highlighting the federal government’s challenges in balancing economic growth and policy implementation.
In recent years, increased infrastructure investments and social security spending have intensified financial pressures on the government. Particularly, post-pandemic economic stimulus programs and infrastructure legislation have further expanded the deficit. However, tax revenue growth has failed to keep pace with rising expenditures, mainly due to high inflation eroding consumer purchasing power, thereby limiting the increase in sales tax revenue.
Increased infrastructure investment and social security spending have intensified the government's financial pressure. (Image / Sourced from Pexels)
While the U.S. economy saw modest growth in the second half of 2024, it remains vulnerable to challenges such as global supply chain disruptions, energy price volatility, and geopolitical instability. At the same time, the Federal Reserve's high-interest rate policies aimed at controlling inflation have increased borrowing costs for businesses and households, further restraining economic activity.
The CBO report also emphasizes that rapidly rising healthcare and social security expenditures will exacerbate fiscal pressures over the next decade. To address this issue, experts recommend accelerating tax reforms, including raising corporate and high-income tax rates to boost revenue. Additionally, cutting non-essential expenditures and improving fiscal efficiency are deemed necessary measures.
Despite these challenges, the U.S. maintains a competitive edge in technological innovation and energy transition. If the government can effectively manage the fiscal deficit, the U.S. economy may achieve sustainable growth in the long run.
