The US federal budget deficit dipped to 2.9% of GDP (gross domestic product) in fiscal year 2014 that ended September 30.
The Congressional Budget Office reported Wednesday that the federal budget deficit for fiscal year 2014 will amount to $506bn, roughly $170bn lower than the shortfall recorded in 2013.
Receipts grew almost 9% from the previous year to $3.013tn, while outlays were up 1.4% to $3.499tn.
At 2.9% of GDP, the CBO said that this year's deficit will be much smaller than those of recent years (which reached almost 10% of GDP in 2009) and slightly below the average of federal deficits over the past 40 years.
However, by CBO's estimates, federal debt held by the public (US institutions, citizens and countries such as China and Japan) will reach 74% of GDP at the end of this fiscal year - - more than twice what it was at the end of 2007 and higher than in any year since 1950.
The CBO said that later in the coming decade, if current laws governing federal taxes and spending generally remained unchanged, revenues would grow only slightly faster than the economy and spending would increase more rapidly. Consequently, relative to the size of the economy, deficits would grow and federal debt would climb.