Asia-Pacific

US budget deficit to exceed $1.3 trillion in 2010

(Xinhua)
Updated: 2010-08-20 01:20

WASHINGTON - The US federal budget deficit will exceed 1.3 trillion dollars in fiscal year 2010, the second largest shortfall in 65 years, just below 2009 level, the US Congressional Budget Office said Thursday.

Related readings:  US predicts rise in economic growth as deficit declines  US federal deficit tops $1t  US trade deficit rises to $42.3b in May  Greek cash deficit down 32.6% so far this year

The US budget gap is expected to be about 1.34 trillion dollars for the year ended in September, 71 billion dollars below last year's total, when the shortfall reached the highest level since the end of the second World War, the nonpartisan CBO said in its updated report on the budget and economic outlook.

The latest deficit projection is 27 billion dollars lower than the amount that CBO projected in March 2010, when it issued its previous estimate. The narrowed gap is primarily due to an expected increase in government revenues and a reduction in fiscal spending.

The CBO projected the US economy to grow 2.8 percent in fiscal year 2010 and slow down to 2.0 percent in 2011.

"The recovery from the economic downturn will continue at a modest pace during the next few years," said the report. "Growth in the nation's output since the middle of calendar year 2009 has been anemic in comparison with that of previous recoveries following deep recessions, and the unemployment rate has remained quite high, averaging 9.7 percent in the first half of this year."