The government’s budget deficit is expected to reach 10 percent of gross domestic product this year, significantly above an already revised target of around 9% of GDP, the Wall Street Journal quoted a senior government official as saying on Wednesday.
The official told WSJ that the economy could shrink by more than percent this year, against a government estimate of 5.5 percent. He attributed to this to shortfalls in tax collection targets ?as many people can’t afford to pay the higher taxes.”
“In 2012 we will be entering a fifth straight year of recession and there doubts we’ll be returning to growth in 2013,» the official was quoted as saying. He reportedly attributed this to a curb on bank loans, rising unemployment and a lack of consumer confidence. ?The market is totally dry. We expect a budget deficit of around 10 percent this year, while recession could slightly exceed 6 percent.»