The US Department of the Treasury has announced that the government’s budget deficit has climbed to USD1.3 trillion in the current fiscal year, fueling concerns about the country’s economic crisis.
Washington’s 2011 budget deficit shows an increase of USD 0.01 trillion dollars from the US deficit in the fiscal year 2010, which stood at USD1.29 trillion, according to the Treasury Department data released on Friday, Bloomberg reported.
The new deficit figure marks the second-largest budget deficit in US history since 2009 when it stood at USD1.42 trillion.
“There is a lot of red ink on the government’s balance sheet and Congress appears clueless on how to make it disappear,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York.
“It is going to be a long and painful process as the economy has slowed to the stall speed,” he added.
Unemployment in the US increased to 9.2 percent in July, which was up from 9.1 percent in June. US consumer confidence fell sharply in August and reached its lowest level since April 2009.
This comes as last month, the International Monetary Fund (IMF) warned in a report that the American economy would grow by just 1.5 percent in 2011 and by 1.8 percent in 2012, noting that it would remain weak for years to come.
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