The outlook is mixed:
Things will get slightly better, then get worse. The deficit is expected to shrink from 7.0 percent of GDP in 2012 to 5.3 percent in 2013. It will then continue to get smaller until 2015 (2.4 percent), at which point the trend reverses and deficits start to slowly creep up again. The vast majority of the deficit reduction comes from increases in revenue instead of reductions in spending. Both spending and revenue, as a percentage of GDP, will be higher than their previous 40 year averages.
Even 2.4% is a huge annual budget deficit; it’s no surprise that reducing spending is the big problem.
Via Economics 21.