U.S. August Budget Deficit falls from a year ago in part due to tariffs
August’s US budget deficit of $344.8bn is down from $380.1bn in August 2024, a $35.3bn decline. Most, but not all of the improvement can be explained by a $22.5bn increase in tariff receipts, to $29.5bn.
Such a level of tariff receipts if sustained over 12 months would bring in around $270bn in revenues, around 0.9% of GDP. Deficits a little less than 6% of GDP are expected going forward, compared with 6.4% in FY 2024.
This is the eleventh month of FY 2025. The deficit in the fiscal year to date of $1973.3bn exceeds the $1897.1bn seen in the first 11 months of FY 2024. The latest month showed outlays up by only 0.4% yr/yr but receipts up by 12.3%, and by 5.1% excluding tariffs. In the fiscal year to date receipts are up by 6.8%, exceeding a 6.0% rise in outlays in percentage, but not USD terms.