White House lowers budget deficit forecast this year

09:35, July 24, 2010      

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U.S. federal budget deficit is expected to reach an all-time high of 1.47 trillion U.S. dollars this year, 84 billion dollars lower than projected in February, the White House said on Friday.

The 2010 deficit is equal to 10.0 percent of the country's Gross Domestic Product (GDP), about the same as the 2009 level, the Office of Management and Budget (OMB) said in its mid-session budget review.

This year's deficit was trimmed due to lower expenditure forecast. For 2011, the red ink is expected to decline to about 1. 42 trillion dollars, or 9.2 percent of GDP, but 150 billion dollars higher than projected in February.

The report predicted that the ratio of budget deficit to GDP will drop sharply to 5.6 percent in 2012, and further down to 4.3 percent in 2013, when President Barack Obama's first term ends.

"The deficit projections show that the budget is still on track to meet the president's goal of cutting the deficit, as a percent of GDP, in half by the end of his first term," said the report.

The deficit that Obama inherited from the Bush administration was equal to 9.2 percent of GDP.

In addition, debt held by the public is projected to reach 9.2 trillion dollars at the end of 2010, or 62.7 percent of GDP. Public debt is expected to continue increasing throughout the ten- year budget horizon to a projected 77.4 percent of GDP in 2020.

The ever-floated budget deficit has aroused widespread concerns and is considered to potentially endanger the sustainability of the country's economic recovery.

Earlier this month, the International Monetary Fund (IMF) urged the U.S. to rein in its soaring budget deficit.

"The central challenge is to develop a credible fiscal strategy to ensure that public debt is put -- and is seen to be put -- on a sustainable path without putting the recovery in jeopardy," the IMF said in a report.

Source:Xinhua

(Editor:李牧(实习))

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