Wednesday, August 27, 2014

U.S. Budget Deficit Expected to Narrow Less Than Forecast

The U.S. budget deficit will narrow less than forecast this year even as it falls to the lowest level since 2007 as a share of the economy, according to the Congressional Budget Office.

The projected shortfall will be $506 billion in the 12 months ending Sept. 30, compared with an April prediction for $492 billion and a $680 billion gap posted last year, the nonpartisan CBO said today in a report. In 2015 it’s projected to shrink for a sixth straight year, to $469 billion, capping the longest stretch of fiscal improvement since 2000, near the end of an era of surpluses.

A declining jobless rate that’s lifting individual and corporate tax revenue will help narrow the gap next year to about a third of the record $1.4 trillion deficit reached in 2009, according to CBO data. The report today shows a fiscal picture that’s improving in the near term before starting to deteriorate, with deficits swelling again starting in 2018.

Bloomberg

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