WASHINGTON The Bush administration on Monday cut its budget deficit forecast for the current year but expanded it to a record $482 billion for 2009 as the weakening U.S. economy slows revenues and spending remains high.
The White House said the budget shortfall for fiscal 2008, which ends September 30, will likely come in at around $389 billion, below its $410 billion estimate released in February, because receipts were holding up better than expected.
However, due to tax rebates, overall receipts will still be below last year.
The White House lowered its forecast for 2008 economic growth to 1.2 percent, measured fourth quarter over fourth quarter, from 2.7 percent previously, putting it in line with private sector projections. But the administration said growth looked set to rebound to 2.9 percent next year and 3.5 percent in 2010, stronger than many private economists expect.
The White House said its projections portray an economy that is fundamentally resilient, with inflation controlled. "If food and energy prices stabilize as expected, the inflation rate should decline," the White House said.
(Reporting by David Lawder; Editing by Leslie Adler)