The March U.S. budget deficit shrank to $119 billion from $147 billion a year earlier as receipts grew and calendar shifts reduced outlays, but the data reflect only a minimal impact from massive coronavirus rescue spending, the U.S. Treasury said on Friday.

Large outlays from the $2.3 trillion coronavirus legislation passed on March 27 and reduced receipts due to higher unemployment and delayed tax returns should have a significant impact on April's budget, a Treasury official said.

In March, receipts totaled $237 billion, up 3% from a year earlier, while outlays fell 5% to $356 billion. But significant March benefit payments were pushed into February, reducing outlays by $51 billion.

Accounting for calendar effects, March had an adjusted deficit of $170 billion compared with an adjusted deficit of $136 billion in March 2019. For the fiscal year, the adjusted deficit was $744 billion compared with $690 billion in the same period the prior year.

The federal government’s budget deficit for the first half of this budget year totaled $743.6 billion, up 7.6% from last year, and well on its way to topping $1 trillion even before the impacts of the coronavirus were felt.

The Treasury Department reported Friday that the deficit from October, the start of the government’s budget year, through March was $52.5 billion higher than the same period a year ago.

The Trump administration and the Congressional Budget Office were already forecasting that this year’s deficit would top $1 trillion for the first time since 2012. But now with a $2.2 trillion rescue package approved by Congress and government spending expected to rise sharply, private economists are estimating that this year’s deficit could well exceed $2 trillion.

Mark Zandi, chief economist at Moody’s Analytics, said that he expects the deficit to hit $2.5 trillion this year and also next year. Previously, the highest deficits in dollar terms occurred in a four-year stretch from 2009 through 2012 when the government was spending billions of dollars to pull the country out of the deepest downturn since the Great Recession, a slump triggered by the 2008 financial crisis.

This year’s deficit will increase because of the $2.2 trillion in additional spending approved in the largest relief package ever passed by Congress but also because government revenues will slump as the economy slows if the country, as expected, enters a deep if short, recession.

Gregory Daco, chief economist at Oxford Economics, said that the deficit for this year will likely hit $2.2 trillion, reflecting an economy in free fall which will depress revenues and the stimulus packages already approved.

“If additional stimulus measures are passed, the deficit will be larger,” Daco said.

Through March, government receipts totaled a record $1.60 trillion for the first six months of the budget year, up 6.4% from the same period a year ago. Outlays were also a record for the first half of the year, totaling $1.88 trillion, up 6.9% from a year ago.

Material from Reuters and the Associated Press has been used in this report.

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