The Bush administration will release new budget projections today showing a larger-than-expected deficit of more than $160 billion this fiscal year due in large part to a sharp decline in stock prices, officials said.
The White House Office of Management and Budget will also revise upward its economic growth forecast for 2002 to about 2.5 per cent from 0.7 per cent.
While the budget deficit in fiscal 2002 is expected to top $160 billion, the White House budget office expects the shortfall to shrink below $150 billion in fiscal 2003 and 2004, with a return to small surpluses starting in fiscal 2005.
The White House will attribute the bigger-than-expected deficits to an unexpected downturn in capital gains receipts due to this year's sell-off in stocks.