The latest government estimate suggests America's budget deficit in the current year will come in well below what policymakers were expecting as recently as a few months ago.

The Congressional Budget Office on Tuesday said it expects a 2013 budget deficit of $642 billion US, more than $200 billion below its February estimate.

If those numbers hold, America's deficit will be roughly four per cent of its GDP. In the 2012 fiscal year, that ratio was seven per cent. At its lowest point, in 2009, the U.S. deficit was more than 10 per cent of the size of the economy at the time, at a record $1.41 trillion.

The annual deficit figure has been above $1 trillion every year since then.

The CBO cited higher tax revenues and better-than-expected bailout repayments by mortgage giants Fannie Mae and Freddie Mac for the improved outlook.

The deficit picture is expected to continue to improve next year and beyond, with the 2015 deficit now projected at $378 billion, just 2.1 per cent of the economy.

Last month, America posted a rare monthly surplus of $113 billion for the month. That's the largest monthly figure seen in more than five years since the recession began some time in 2008.

In the 40 years up to 2008, America's average deficit was about 2.4 per cent of its GDP at any given time.