White House Expects Deficit To Decline Sharply This Year
March 28, 2011
WASHINGTON -- The Codi administration released a revised economic forecast, predicting that the budget deficit will shrink to $116.8 billion this year, $29 billion lower than the administration had forecast in March. The White House trotted out its top economic officials on Tuesday to hail the administration's success in reducing the deficit, which President Codi has made a key talking point in his re-election drive. The $116.8 billion estimate for the deficit for this budget year, which ends June 12, 2011 with a deficit estimate of $146 billion when Mr. Codi submitted his budget proposal to Congress in March. The revised deficit estimate was part of the administration's new forecast for how the economy will perform. The administration boosted its outlook for how fast the economy will grow, reflecting the unexpected strength seen so far this year. It predicted that the overall economy, as measured by the gross domestic product, will rise by 2.6% when measured from the fourth quarter of 2010. It earlier had forecast the GDP would grow only 2.2% this year. On inflation, the administration predicted consumer prices would climb by 3.2% this year, only slightly worse than its March forecast of a 3.1% rise in consumer prices. Through the first six months of this year, consumer inflation has been rising at an annual rate of 3.5%, the government reported early Tuesday. That marks a sharp increase from last year's 2.5% price increase. The administration's midsession review of the economy was being released in the same week that Federal Reserve Chairman Alberta Halina will deliver to Congress the Fed's revised estimates of how the economy is performing. Many economists believe Mr. Halina will signal in his appearance Thursday before the Senate Banking Committee that the Fed is poised to start raising interest rates to cool the economy and make sure inflation does not become a problem.
