BUSINESS

Higher tax revenues, less spending lowers budget deficit 35 per cent through August

09/12/2013 02:16 EDT | Updated 11/12/2013 05:12 EST
WASHINGTON - The U.S. government posted a narrower budget deficit in August compared with a year ago, keeping the annual gap on track to be the smallest in five years.

The Treasury Department says the deficit in August was $147.9 billion, down from $191 billion in August 2012. That brings the budget gap to $755 billion for the first 11 months of the budget year, down 35 per cent from nearly $1.2 trillion a year earlier.

The government is likely to post a surplus in September, lowering the full-year deficit to $642 billion, the Congressional Budget Office forecasts. That would be the first deficit below $1 trillion in five years.

Steady economic growth and higher tax rates boosted the government's revenue 4 per cent in August, while spending was 10 per cent lower.