World Economy

White House Slashes Deficit Forecast

White House Slashes Deficit ForecastWhite House Slashes Deficit Forecast

The White House cut down its forecasts for US fiscal deficit in 2015 fiscal year and also for economic growth in calendar 2015.

The Mid-Session Review budget update shows that the White House is now expecting a $455 billion deficit in 2015 fiscal year which started on Oct. 1, 2014 and ends on Sept. 30, 2015. The forecast is nearly $30 billion less than last fiscal year’s deficit and $128 billion lower than its last estimate in February, Xinhua reported.

The Office of Management and Budget under the White House, author of the budget update, said the revision is mainly due to new calculations of higher revenues and lower spending.

The report also cut forecast for US economic growth for calendar 2015 down to 2% from its previous estimate of 3%, which largely reflects the economic contraction in the first quarter of this year.

It expects economic growth to rebound in the second quarter and remain above trend during the second half of 2015 and through 2018. According to its forecast, the US economy is projected to grow 2.9% in 2016 and then slow to 2.8% during 2017.

The White House’s improved budget forecast comes as Congress faces budget debate in coming months over funding for the new fiscal year starting on Oct. 1.