THE US budget deficit shrank by nearly 9 per cent in the last fiscal year, according to government figures published overnight, as spending decreased and revenues rose.
The figures "underscored the administration's commitment" to cutting the massive government deficit, Treasury Secretary Timothy Geithner said.
For the 2010 fiscal year that ended on September 30, the government had a budget deficit of $US1.294 trillion, down 8.6 per cent from a record-setting $US1.416 trillion in the previous year.
In terms of the deficit's ratio to economic output, the 2010 budget gap was 8.9 per cent of gross domestic product, down from 10.0 per cent of GDP in fiscal 2009.
"Our fiscal outlook, which remains challenging, has improved over the past year," Mr Geithner and the head of the Office of Management and Budget, Jeffrey Zients, said in the joint statement.
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They said the improvement was due to "careful stewardship" of the emergency programs undertaken to put the economy on the recovery track after the worst recession in decades.
"By carefully managing the emergency initiatives to stop the financial panic and by accelerating our exit from those investments, we have significantly lowered the cost to taxpayers, bringing the costs of the financial rescue down by more than $US240 billion this year," Mr Geithner said.
The Treasury chief warned, however, that "we still have a long way to go to repair the damage to the economy and address the long-term deficits caused by the crisis."
President Barack Obama's administration goal is to reduce the deficit to 4.3 per cent of GDP in fiscal 2013.
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