The Trump administration’s tariff policies are expected to bring down the fiscal deficit of the United States this year, the International Monetary Fund (IMF) said in an April 23 report.
Fiscal deficit, also known as national deficit, occurs when a country’s government spends more money than it earns during a fiscal year.
The general government fiscal deficit of the United States in 2024 was 7.3 percent of GDP, which is expected to fall to 6.5 percent in 2025, the IMF said, adding that the “magnitude of the tariff revenue increase is highly uncertain.”
The prediction is contingent on the United States’ benefiting from higher tariff revenues. As such, the current 90-day pause on reciprocal tariffs announced on April 2 and other measures could result in “lower import revenues.”…