White House slashes US deficit forecast for FY2015

The White House on Tuesday 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-dollar deficit in 2015 fiscal year which started on Oct. 1, 2014 and ends on Sept. 30, 2015. The forecast is nearly 30 billion US dollars less than last fiscal year's deficit and 128 billion US dollars lower than its last estimate in February. 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 percent from its previous estimate of 3 percent, which largely reflects the economic contraction in the first quarter of this year. It expects the 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 percent in 2016 and then slow to 2.8 percent 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.