US Treasury Secretary Scott Bessent has highlighted a decrease in the US deficit-to-GDP ratio, asserting it as proof that President Donald Trump’s economic strategies are effective and are not causing a recession. Bessent made these remarks at a community bank conference hosted by the Federal Reserve, noting the deficit-to-GDP ratio now has a ‘five in front of it’.
This statement follows the Congressional Budget Office’s (CBO) release of its estimates for September’s federal spending and revenue, along with projections for the complete 2025 fiscal year. The CBO projects the budget deficit for fiscal year 2025 will remain close to 2024 levels, at $US1.8 trillion ($2.8 trillion). However, factoring in the CBO’s GDP estimate, the deficit ratio is expected to decrease to 5.9 per cent. Treasury figures for 2024 show the ratio stood at 6.4 per cent.
Bessent previously expressed his goal to reduce the deficit ratio to ‘something with a three in front of it’ by the conclusion of Trump’s second term. He emphasised that the 2024 ratio ‘was the highest when we weren’t at war or weren’t in a recession in US history’.
‘We’re on our way,’ Bessent stated, adding, ‘I think we saw that today.’ The Treasury Department oversees the nation’s finances. It manages government revenue, disburses payments, and formulates economic policy.
