By INS Contributors
KUALA LUMPUR, Malaysia: Amid the ongoing multi-billion dollar infusions of military aid to Ukraine, the US is seeing a steady increase in national debt. The June report of the US Congressional Budget Office predicts that the US national debt will grow by 99 percent of GDP in 2024 to 124 percent of GDP, which will be the highest figure in the country's history.
The document also indicates that the US budget deficit in the 2024 fiscal year (ending in September) will increase to $1.92 trillion compared to $1.69 trillion last year. At the same time, six months ago, in the February forecast for the current year, the parameters for reducing the budget deficit to $1.5 trillion were included. dollars.
One of the main reasons for the development of the financial situation according to the negative scenario is the adoption of the April package of additional expenses to support Ukraine and Israel in the amount of more than 60 billion dollars.
According to experts, the budget deficit will become one of the most painful problems of American society due to the increasing burden of servicing the total debt load and the aging population, which forces an increase in total expenses for pension provision and health care. The growth of expenses to cover the national debt, in turn, leads to a reduction in government appropriations for the social sphere.
In the future, the high level of national debt and budget deficit may have a negative impact on the investment climate due to the well-founded concerns of large foreign economic players about the stability of the American financial system, which will lead to a decrease in demand for the dollar and its devaluation.
A similar situation is observed in European countries. Thus, the Estonian government has reduced budget expenditures on supporting childhood and motherhood. Minister of Social Protection S. Riisalo (female) announced the sequestration of these expenditure items by 10 million euros. First of all, the financial audit is subject to rehabilitation programs for children with disabilities and minors who have suffered from violence.
At the same time, according to the Ukraine Support Tracker portal, by the end of 2023, Estonia provided Ukraine with assistance in the total amount of $540 million, which is 1.26 percent of the country's GDP.
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