(Bloomberg) -- The U.S. budget deficit widened by 16 percent to $607 billion three-quarters of the way through Donald Trump’s first full fiscal year as president, as spending accelerated faster than revenue.
The shortfall in the nine months through June was larger than the $523 billion gap in the same period of fiscal 2017, according to a report from the Treasury Department released Thursday. Revenue rose to $2.54 trillion in the period, up 1.3 percent from a year earlier. Spending rose 3.9 percent to $3.15 trillion.
Compared to the same period last year, spending on interest payments and the country’s three largest mandatory programs -- Social Security, Medicare and Medicaid -- increased, according to a Congressional Budget Office report released Monday. Due largely to disaster relief efforts, the Department of Homeland Security also boosted its spending by 51 percent to $18 billion, the report said.
In December, Trump signed into law about $1.5 trillion in tax cuts intended to boost economic growth, wages and investment, and he signed off on a $300 billion spending increase this year.
While the economy likely quickened in the second quarter from the first three months of the year, revenue in the April-June period totaled $1.04 trillion, up slightly from $1.03 trillion in the same period a year earlier.
In addition to increased spending on social safety-net programs, the federal government faced rising payments for net interest on public debt, partly attributable to an uptick in inflation, the CBO said.
The budget gap narrowed last month to $74.9 billion, from a $90.2 billion deficit in June 2017, the report showed.
The June deficit figure was in line with expectations, Wells Fargo Securities LLC economists John Silvia and Michael Pugliese said in a note, adding their forecast remains unchanged that the fiscal year 2018 deficit will come in at $775 billion.
“The stimulus impact from the recent budget deal is starting to become evident,” Silvia and Pugliese wrote. “We expect the deal to add a few tenths of a percentage point to real GDP growth in 2018, with the impact fading by the second half of 2019.”
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