US fiscal deficit to hit $1.3 trillion
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Xinhua, September 2, 2011
The U.S. federal government's deficit is projected to reach 1.316 trillion U.S. dollars for the 2011 fiscal year, and the nation's unemployment rate is forecast to decline next year, the White House Office of Management and Budget (OMB) said Thursday.
The figure is 329 billion dollars or about 20 percent lower than the 1.645 trillion dollars deficit forecast in February, due to a combination of higher-than-expected receipts and lower-than- expected outlays, said the office in a report.
The U.S. Treasury figures showed that the U.S. federal deficit stood at around 1.1 trillion dollars in the first ten months of the 2011 fiscal year, which began in October 2010, indicating three years in a row that the U.S. fiscal imbalance would have topped 1-trillion-dollar mark.
The federal deficit is now projected to equal 8.8 percent of gross domestic product (GDP) for the 2011 fiscal year, down from 10.9 percent predicted in February, the office said in a Mid- Session Review (MSR) report updating the administration's fiscal situation and the economic outlook.
The total reduction of federal deficit is forecast to reach 1.45 trillion dollars over the next decade, primarily due to the bipartisan debt cut deal inked last month.
The White House predicted that federal deficit to GDP ratio would edge down to 6.1 percent in the 2012 fiscal year, on the back of spending cuts and a solid economic growth pace.
"2011 has seen drags on the economy in the form of a sharp rise in oil prices, the disruption to global supply chains as a result of the earthquake in Japan, a slowdown of growth in Europe, a sluggish rebound in the housing market, and uncertainty surrounding congressional action on the debt ceiling," said the report.
The U.S. housing market is "so severely out of balance" that it is hampering the economic recovery, and the nation should endeavor to trim the large inventory of foreclosed homes, U.S. Federal Reserve Governor Elizabeth Duke said at a housing forum held in Washington, D.C., Thursday.
The OMB held that the current economic growth and job creation pace were not strong enough to bring down the unemployment rate to an acceptable level, predicting that the nation's unemployment rate would edge down to 8.3 percent next year from the 9.1 percent in July.
Obama's jobs creation package to be unveiled next week will not only give a boost to the short-term economic expansion, but also lay the foundation for long-term economic growth, White House spokesman Jay Carney told reporters Thursday.
The office also said it would take several years of healthy job growth to offset the nearly 9 million jobs that were lost between January 2008 and February 2010.
"With continued growth, the unemployment rate is projected to fall, but it is not projected to fall below 6 percent until 2016," said the report.
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