The West

US trims deficit by $US83b in eight  months
US trims deficit by $US83b in eight months

The US trimmed its budget deficit by $US83 billion ($A84.49 billion) in the first eight months of fiscal 2012, the Treasury has reported, as income sped up while spending was basically flat.

The deficit in the October-May period was $US844 billion ($A859.16 billion), nearly 9 per cent down from a year earlier, helped by a 5.4 per cent increase in tax and other receipts to $US1.56 billion ($A1.59 billion).

Spending at $US2.41 billion ($A2.45 billion) in the eight months was a bare 0.2 per cent lower.

The Treasury on Tuesday said that some calendar-based differences to its operations from last year to this masked a larger, $US101 billion ($A102.81 billion) reduction in the deficit during the period.

On Friday, Standard & Poor's warned that the US continued to risk a new downgrade of its credit rating due to the political deadlock that is preventing a concerted medium-term plan for cutting the deficit.

In its base-case projections, S&P said the fiscal deficit, as a share of gross domestic product (GDP), will decline from 10 per cent in 2011 to five per cent by 2016.

Even at that level, the deficit-GDP ratio "would still be at the high end of the ranges we use to assess sovereigns' fiscal performance".

The West Australian

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