The budget deficit of the United States in 2022 will be cut in half compared to 2021, which is “new evidence of the economic reconstruction of the country”, President Joe Biden said on Friday, ahead of the midterm elections, according to AFP.

The federal deficit for the 2022 fiscal year, which ended in September, was $1.375 billion, $1.4 trillion less than last year, “the largest reduction in the federal deficit in American history,” the Democratic president said.

The country’s current account liabilities are shrinking for the second straight year after hitting a record high of more than 3 trillion in 2020 due to the Covid-19 health crisis.

Reducing the deficit in 2022 is “another sign of recovery” in the US economy, Biden said from the White House, adding that under his Republican predecessor, Donald Trump, the hole had grown “every year” in the government’s accounts.

The federal deficit is now 5.5 percent of gross domestic product (GDP) in the world’s largest economy, up from 12.3 percent last year and 15 percent in 2020.

“This is a testament to our historic economic recovery, which was driven by our vaccine efforts and the plan to support President Biden,” Treasury Secretary Janet Yellen said in a statement.

The narrowing of the deficit was largely due to the suspension of emergency spending related to Covid-19, which has damaged the global economy, as well as a strong recovery in the US labor market. The recovery in the labor market has increased income tax revenues, which are the most important resource for the federal government.

The US economy has gained about 10 million jobs since the health care crisis, and the unemployment rate has fallen to its lowest level in 50 years.

However, the hole in the public accounts of almost 1400 billion is still much larger than in 2019 (908 billion), before Covid-19.

In addition, things could be tougher in 2023 as the Federal Reserve (Fed) raises interest rates to fight inflation, which will increase repayments on the abysmal US debt.