US on track to cut deficit by 40% in 2013:

THE US budget deficit will fall to $US642 billion ($A652.01 billion) this year from $US1.1 trillion in fiscal 2012, helped by surging revenues and repayments from housing agencies rescued in the 2008 crisis, the Congressional Budget Office forecast on Tuesday.

That was more than $US200 billion lower than the deficit projected by the CBO in February.

The decline to the smallest US fiscal shortfall since 2008 was "mostly as a result of higher-than-expected revenues and an increase in payments to the Treasury by Fannie Mae and Freddie Mac".

The two mortgage giants, put under government control in 2008 as they neared collapse, have since recovered profitability and are paying dividends on stock held by the government.

The latest CBO estimates take into account the severe automatic "sequester" spending cuts that began on March 1, aimed at slicing $US85 billion from expenditures through the end of September.

The CBO estimated the US deficit would fall to 4.0 per cent of gross domestic product compared with 7.0 per cent in 2012.

Even as the budget deficit is narrowing quickly, the CBO said the country's debt ceiling would likely need to be raised by October or November to keep funding the government.

By congressional law, the US Treasury will be blocked from borrowing any additional money to fund the deficit after May 18. The Treasury has said it has special measures it can take to manage under the ceiling for several months, at least September.

Congressional Republicans, battling the White House over how to close the deficit, have linked increasing the statutory ceiling to agreeing a new federal budget and long-term debt reduction plan.

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NZ deficit shrinks faster than expected

THE New Zealand government's finances are continuing to improve with a smaller operating deficit than forecast in the first nine months of the financial year, even as the cost of the Canterbury earthquakes grew an expected $NZ192 million.

The operating balance before gains and losses (obegal) was a deficit of $NZ4.95 billion ($A4.14 billion) in the nine months ended March 31, smaller than the $NZ5.22 billion shortfall expected in the half-year economic and fiscal update, according to the Crown's latest accounts.

Core tax revenue continued to track ahead of expectations at $NZ41.86 billion with gains in the personal income tax base coming from the higher end of the pay scale.

Core crown expenses of $NZ52.17 billion were broadly in line with expectations, as delays to Treaty of Waitangi settlement costs and New Zealand's aid programme were offset by higher than expected costs from rebuilding Canterbury's infrastructure.

Last month Prime Minister John Key said the cost of the Canterbury rebuild rose $NZ10 billion to $NZ40 billion, of which the government will cover an extra $NZ2 billion, taking the net fiscal cost to some $15 billion. Despite the increased cost, Mr Key said the government is still on track to reach its surplus target in 2014/15.

The government's insurance liability for the Earthquake Commission was $NZ7.59 billion as at March 31, almost 11 per cent bigger than forecast, while the liability from AMI Insurance, now known as Southern Response, was 45 per cent ahead of expectations at $NZ1.85 billion.

The government's net debt was $NZ58.48 billion, or almost 28 per cent of gross domestic product, 2.4 per cent below forecast.

The operating balance was a surplus of $NZ2.52 billion, ahead of a forecast deficit of $NZ1.98 billion for the nine month period, due to gains in the value of the New Zealand Superannuation Fund and Accident Compensation Corp investment portfolios, and an actuarial gain on the future cost of ACC's liabilities.

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NZ deficit shrinks faster than expected

THE New Zealand government's finances are continuing to improve with a smaller operating deficit than forecast in the first nine months of the financial year, even as the cost of the Canterbury earthquakes grew an expected $NZ192 million.

The operating balance before gains and losses (obegal) was a deficit of $NZ4.95 billion ($A4.14 billion) in the nine months ended March 31, smaller than the $NZ5.22 billion shortfall expected in the half-year economic and fiscal update, according to the Crown's latest accounts.

Core tax revenue continued to track ahead of expectations at $NZ41.86 billion with gains in the personal income tax base coming from the higher end of the pay scale.

Core crown expenses of $NZ52.17 billion were broadly in line with expectations, as delays to Treaty of Waitangi settlement costs and New Zealand's aid programme were offset by higher than expected costs from rebuilding Canterbury's infrastructure.

Last month Prime Minister John Key said the cost of the Canterbury rebuild rose $NZ10 billion to $NZ40 billion, of which the government will cover an extra $NZ2 billion, taking the net fiscal cost to some $15 billion. Despite the increased cost, Mr Key said the government is still on track to reach its surplus target in 2014/15.

The government's insurance liability for the Earthquake Commission was $NZ7.59 billion as at March 31, almost 11 per cent bigger than forecast, while the liability from AMI Insurance, now known as Southern Response, was 45 per cent ahead of expectations at $NZ1.85 billion.

The government's net debt was $NZ58.48 billion, or almost 28 per cent of gross domestic product, 2.4 per cent below forecast.

The operating balance was a surplus of $NZ2.52 billion, ahead of a forecast deficit of $NZ1.98 billion for the nine month period, due to gains in the value of the New Zealand Superannuation Fund and Accident Compensation Corp investment portfolios, and an actuarial gain on the future cost of ACC's liabilities.

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US trade deficit shrinks to $43bn in Feb

THE US trade deficit edged lower in February after a big jump in January, government data released on Friday shows.

The Commerce Department reported the trade gap shrank to $US43 billion ($A41.4 billion), down from the revised $US44.5 billion in January.

The decline, which came after a large 16.7 per cent deficit increase in January, surprised analysts who had projected a deficit of $US44.7 billion.

US exports grew 0.8 per cent to $US186 billion, strengthened by the exports of industrial goods (up 4.5 per cent) and cars (up 1.6 per cent).

Meanwhile, US imports held steady at $US228.9 billion.

US imports of crude oil, which represent more than 10 per cent of imported goods by the US, dropped 5.6 per cent to $US23.6 billion.

But US imports of foreign cars rose 4.6 per cent between January and February to reach $US24.8 billion.

On a 12-month basis, the US trade deficit has dropped by 3.5 per cent.

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