U.S. posts smaller-than-expected budget deficit in July

The U.S. federal government posted a smaller-than-expected budget deficit in July, primarily due to a surge in corporate tax revenue amid economic recovery.

The federal budget deficit narrowed to 165 billion dollars in July from an all-time high of 180.7 billion dollars for the same time last year. Economist had expected a gap of 169 billion dollars.

The budget gap for the fiscal year ended in September to date was 1.17 trillion dollars, down from a deficit of 1.27 trillion dollars for the same period in 2009.

The decline in the budget imbalance was helped by an increase in corporate tax revenue as the economy began to recover from the worst recession since the Great Depression in the second half of last year.

Through the first 10 months of this fiscal year, corporate tax revenue rose 34 percent to 139.7 billion dollars, bringing the total government revenues to 1.75 trillion dollars, an increase of 0.7 percent from the same time last year.

Government expenditure totaled 2.92 trillion dollars through July, down 2.8 percent from the same period last year. This was primarily a result of less demand for government emergency funding.

The U.S. federal deficit soared to a historical high of 1.42 trillion dollars in fiscal year 2009. The Obama administration forecast the budget deficit to further balloon to 1.47 trillion dollars this year.

The soaring budget deficit has caused widespread concerns and is feared to potentially endanger the sustainability of the country's economic recovery.

The International Monetary Fund (IMF) last month urged the United States to rein in its ballooning 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