The U.S. Treasury lowered its net borrowing estimate for 2013 by $11 billion on Monday, due in part to a higher cash balance at the beginning of the year.
The Treasury reduced its expected borrowing needs from January through March to $331 billion, and officials expect net borrowing of $103 billion in the second quarter. In the fourth quarter of 2012, the U.S. Treasury borrowed $297 billion, Businessweek reports.
“Part of the higher cash balances were the result of taxes paid on income pulled forward into 2012 in order to avoid potentially higher tax rates resulting from fiscal cliff negotiations,” Thomas Simmons, a government debt economist at Jeffries Group, said, according to Businessweek. “The first of the year is especially difficult to forecast due to the uncertainty surrounding the timing of tax refund payments and income tax receipts.”
During the fourth quarter of 2012, the U.S. economy ground to a halt after defense spending cuts overcame gains by businesses and consumers. GDP fell at an annual rate of 0.1 percent, a weaker figure than predicted by economists and the worst performance since the second quarter of 2009 during the recession.
The Senate voted late last month to put the decision to raise the debt limit on hold for three months, thereby temporarily eliminating the risk of government default on financial obligations. The measure, which was signed by President Obama on Monday, will lift the $16.4 trillion borrowing limit until May 19. Though the debt limit has been temporarily suspended, $1.2 million in automatic spending cuts are set to take effect March 1, Businessweek reports.