US posts biggest monthly budget surplus in 5 years

The US Treasury said that the country's budget surplus in April was $113 billion, the largest in five years on the back of increased tax revenue.

It was the first surplus since the beginning of the year and was $54 billion more than the surplus posted for the same month last year falling in line with analysts' consensus estimates of $112 billion.

The April surplus, which is usually higher due to tax receipts, was the biggest since the $159 billion excess reported in April 2008.

Tax revenues were up 28 per cent at $407 billion compared to last year, while government spending was 13 per cent up at $294 billion.

The budget deficit that has exceeded $1 trillion consecutively for the last four years is likely to hit $845 billion this year, down from $1.1 trillion in 2012 and the lowest since 2008.

Revival of the nation's economy and higher tax rates have boosted tax revenues, easing the pressure on lawmakers to lift the nation's legal borrowing limit.

The country has added 1.4 million workers during the first seven months of the fiscal year 2013 that began in October 2012, boosting tax revenue and reducing the need to sell debt.

For the October-April period, the budget deficit was $488 billion which is 32 per cent lower than the $720 billion deficit for the same period a year ago.

The US budget deficit is forecast to decline to a low of $430 billion in 2015. However, it is projected that the deficit will start growing again and get close to $1 trillion mark in a decade, on growing medical and social security benefits.

Although the US is due to hit its borrowing limit on 18 May, it is widely expected that a decision on the debt ceiling could be pushed out to sometime in October.

In February, president Barack Obama had suspended the $16.4 trillion debt limit through 18 May.

Last week, the country's bail-out mortgage giant Fannie Mae said that it would pay $59.4 billion as dividend to the Treasury after reporting record profit in the first quarter. (See: Fannie Mae to pay $59.4 bn to US Treasury as profit surge)

In an interview over the weekend, Treasury secretary Jacob Lew told CNBC that the $59.4 billion that the mortgage financier will pay to the Treasury by the end of June will help avoid breaching the borrowing limit up to at least the beginning of September.