MercoPress. South Atlantic News Agency

Record US budget deficit.

The US budget deficit is forecasted to reach this year a record 445 billion US dollars compared to 375 billion in 2003, but considerably less that the 521 billion estimate of last February. (Fiscal 2004 ends next September 30)

The White House blamed the war on terror and the economic downturn as contributing factors to the deficits but admitted that an improvement in tax receipts during the second half of the fiscal year helped to reduce the original estimate. In 2005 the deficit is expected to drop to 331 billion US dollars.

"We are meeting our national priorities and by showing spending restraint elsewhere in the budget we are on track to meet president Bush's commitment to cut deficits by half in the next few years", said White House spokesman Scott McClellan.

But Gene Sperling an economic advisor to Democrat presidential candidate John Kerry underlined that "even worse than this record deficit is the record deterioration George Bush has caused on the long term fiscal health of the country and his lack of any plan to restore financial discipline".

Last Friday the Department of Commerce released some worrisome data, the US economy during the second quarter of this year expanded at an annual rate of 3%, down from the 4,5% of the first quarter. Similarly inflation expanded an annual rate of 3,3%, with the core rate stripped of volatile food and energy increased 1,8%.

The bright side of the Commerce Department was that business fixed investment surged at an annul rate of 8,9% compared to 4,2% in the first quarter.

However oil prices and supply turbulences pose a big question mark given the volatile situation in the Middle East and the legal dispute involving Russia's main energy corporation.