WASHINGTON, Feb. 13--The federal budget deficit is running at a pace that is more than double last year’s imbalance through the first four months of the budget year.
In its monthly review of the government’s finances, the Treasury Department said Tuesday that the budget was in surplus in January, but totals a deficit of $87.7 billion (60.32 billion euros) so far this budget year, double the $42.2 billion imbalance recorded during the same period in 2007, AP wrote.
The new budget year started last Oct. 1.
The Bush administration sent its final budget request to Congress last week, projecting that the deficit for all of 2008 will total $410 billion (282.02 billion euros), very close to the all-time high in dollar terms of $413 billion in 2004.
So far this year, federal spending is 8.3 percent ahead of last year’s pace, at $949.1 billion (652.84 billion euros). That is far ahead of the 3.2 percent increase in revenues, which have totaled $861.4 billion in the current budget year.
For 2007, the budget deficit totaled $162 billion, a five-year low. However, the slowing economy is expected to stunt the growth of tax revenues while the $168 billion economic stimulus plan passed by Congress last week will swell the deficit.
It is hoped the stimulus plan will keep the economy out of a recession or at least make the downturn milder and shorter than it otherwise would have been. The rebate checks are expected to start being mailed out in May with most Americans getting checks of $600 (412 euros) for individuals and $1,200 (824 euros) for couples filing their tax returns jointly. In addition, families with children will get an extra $300 (206 euros) per child.
Meanwhile, the Federal Reserve, seeking to combat the effects of a serious credit crisis, said Tuesday it had auctioned $30 billion (20.64 billion euros) in funds to commercial banks at an interest rate of 3.010 percent.
It marked the fifth in a series of auctions that so far have pumped $130 billion (89.42 billion euros) in money into the US banking system in an effort to provide cash-strapped banks with extra reserves. The Fed’s hope is that the increased resources will keep banks lending and prevent a severe credit squeeze from making the current economic slowdown worse.

Putin (r) and his Ukrainian counterpart Viktor Yushchenko exchange documents as they meet in Moscow on Tuesday.

MOSCOW, Feb. 13--Russia and Ukraine on Tuesday reached a deal to resolve a row over gas debt in which energy giant Gazprom had threatened to cut supplies to Ukraine, Russian President Vladimir Putin said. “Gazprom is satisfied with the offers made by the Ukrainian side,“ Putin said. “We have agreed on the principles of cooperation.“
“We agreed that Ukraine will pay back the debt“ accumulated in 2007, Ukrainian President Viktor Yushchenko was quoted by AFP as saying.
The presidents spoke to journalists after negotiations ended within minutes of a 6:00 pm deadline set by Gazprom for Kiev to pay a claimed debt of $1.5 billion (one billion euros) or face a partial cut in energy supplies.
Putin said he was “sorry“ about the row between the two countries and that they had “come up with a common plan for working in the near future.“
Under the deal, Ukraine will begin to pay off its debts on Thursday and two controversial intermediary gas trading companies will be replaced, Gazprom said in a statement. “Deliveries of gas to Ukraine will be carried out at full volume,“ the statement said.
Change to the murky system of intermediaries by which Ukraine pays for gas imported from Russia and via Russia from Central Asia had been a key demand by Ukrainian Prime Minister Yulia Tymoshenko.
RosUkrEnergo and UkrGazEnergo, which have been at the centre of repeated corruption allegations in the Russian press, will be replaced by two firms jointly owned by Gazprom and Ukrainian state energy firm Naftogaz, the statement said.
The dispute echoed a gas pricing row in 2006 that led to gas disruptions across Europe after Gazprom cut all supplies to Ukraine, the main transit route to the European Union. This time Gazprom said the cut-off would affect only a portion of supplies to Ukraine and would have no impact on deliveries transiting Ukraine to the European Union.
The EU welcomed the deal, expressing hope it would help avoid future problems.
Russian newspapers noted Ukraine had acquired a bargaining chip in relations with Moscow by receiving an invitation to join the World Trade Organization. Ukrainian membership will give Kiev influence over Moscow’s own painfully drawn-out negotiations to join the global trade club, state daily Rossiiskaya Gazeta noted.

CARACAS, Venezuela, Feb. 13--Venezuela’s state oil company said Tuesday that it has stopped selling crude to Exxon Mobil Corp. and has suspended commercial relations with the US-based oil company, AP reported.
State-run Petroleos de Venezuela SA, or PDVSA, said in a statement that it “has paralyzed sales of crude to Exxon Mobil“. It said the decision was made “as an act of reciprocity“ for the company’s “judicial-economic Harassment“.
President Hugo Chavez also has shaken oil markets with broader threats to cut off oil supplies to the United States, responding to a drive by Exxon Mobil to seize Venezuelan assets through US and European courts in a dispute over the nationalization of oil ventures in Venezuela.
The impact of the decision on Exxon Mobil was not immediately clear. Both Chavez and Oil Minister Rafael Ramirez previously said the Irving, Texas-based company is no longer welcome to do business in Venezuela.

UK lenders lowered the cost of mortgages for 95 percent of the price of a property, fixed for 24 months, by 0.08 percentage point in January.

LONDON, Feb. 13--The UK housing-market slump deepened in January to the worst since the British economy emerged from its last recession in 1992, the Royal Institution of Chartered Surveyors said.
The number of residential property agents and surveyors who say prices fell exceeded those reporting gains by 54.7 percentage points, the most in 15 years, the group said on Tuesday. In London, the result matched the most since May 2003, Bloomberg reported.
Bank of England policy makers cut the benchmark interest rate for the second time in three months last week as the property market’s weakness threatened to exacerbate the economic slowdown. Banks have also curbed lending, stifling demand from homebuyers in need of credit and preventing consumers from adding to their record debt.
“Agents are finding it difficult to market properties to an audience which has decided to watch the current economic theater from the wings“, Jeremy Leaf, a spokesman for RICS, said in a statement. “Tightening mortgage lending criteria is a block to many who are keen to take the housing market plunge.“
The pound snapped three days of gains against the dollar after the report, falling as much as 0.2 percent. The UK currency traded at $1.9560 as of 8:21 a.m. in London.
Banks have shown reluctance to pass on the effects of rate cuts to customers after more than $145 billion in writedowns and loan-losses worldwide. Lenders lowered the cost of mortgages for 95 percent of the price of a property, fixed for 24 months, by 0.08 percentage point in January, less than half the benchmark rate reduction the previous month, central bank data show.
The Bank of England’s rate is now at 5.25 percent after quarter-point rate cuts in December and on Feb. 7.
A measure of expected house prices fell one point to minus 63, the lowest since records began in October 1998, RICS said. Apart from Scotland, every region showed declines, with the worst results in Northern Ireland and the north of England. A net 43 percent of London respondents reported price drops.

TOKYO, Feb. 13--Japan’s current account surplus shrank in December for the first time in a year owing to high crude oil prices and a drop in exports to the ailing US economy, the government said Wednesday.
The deterioration added to concerns about the impact on Asia’s largest economy of the US housing slump and wider economic downturn, analysts were quoted by AFP as saying.
Japan had a surplus of about 1.70 trillion yen ($15.8 billion) in December in the current account, the broadest measure of trade in goods and services, down 4.7 percent from a year earlier, the finance ministry reported.
The figure was smaller than market expectations for a surplus of about 1.76 trillion yen.
“Higher oil prices, which inflated Japan’s imports, were the main reason for the reduced current account surplus in December. Exports are another concern,“ said Junko Sakuyama, economist at Dai-ichi Life Research Institute.
The trade surplus alone shrank 16.8 percent to 1.01 trillion yen in December. Imports rose 12.5 percent, outpacing exports which gained 7.1 percent. While exports rose, “they need close monitoring to see if the trend can be maintained as shipments to the EU are also slowing down,“ said Sakuyama.
The finance ministry reported last month that Japan’s exports to the United States fell by 4.5 percent in December, although shipments to Asia jumped 8.2 percent.
“Japan’s exports will be a worry in the coming months when the effects of a slowing US economy in the December quarter begin to impact Asian nations,“ said Norio Miyagawa, economist at Shinko Research Institute.
While Japan’s current account surplus may continue to shrink, it is unlikely to turn to a deficit thanks to the rising income account surplus, he said.
The income account surplus grew by almost 20 percent to 1.005 trillion yen in December as companies and individuals saw increased returns on overseas investments.
For the whole of 2007, Japan’s current account surplus grew by 26 percent to 25 trillion yen, up for a second straight year on strong exports, the government said.
The trade surplus alone rose 30.8 percent to 12.38 trillion yen with exports rising 11.3 percent and imports up 8.3 percent.

The price of platinum soared to a record high near $2,000 as the precious metal was swept higher by persistent supply concerns in top producer South Africa.

LONDON, Feb. 13--The price of platinum soared to a record high near $2,000 here on Tuesday as the precious metal was swept higher by persistent supply concerns in top producer South Africa.
On the London Platinum and Palladium Market, Platinum struck a record $1,972.75 per ounce, AFP reported.
On Monday, the metal had peaked at $1,899.25 before falling back slightly. “Platinum prices draw closer to the 2,000-dollar level as (electric) power concerns persist,“ wrote analysts at Barclays Capital in London, referring to recent severe shortages in South Africa. “Power concerns continue to plague South African production.“
In recent months, prices for the precious metals have risen sharply on concern over deliveries from South Africa, where output has been severely hampered by accidents, a miners’ strike and now power shortages.
White metal Platinum is used to make expensive jewelry and catalytic converters in vehicles.

BRUSSELS, Belgium, Feb. 13--The European Commission demanded Tuesday that China provide proof that rice products it is sending to the EU do not contain a genetically modified strain.
“The European Commission decided on Monday to require compulsory certification for the imports of Chinese rice products that could contain the unauthorized GMO (Genetically Modified Organism) Bt63,“ AFP quoted a statement as saying.
The EU’s executive arm said it took the decision after the strain was found in rice products from China as late as last year despite measures introduced there to stop them reaching Europe.
The commission’s move means that as of April 15, only certain consignments of Chinese rice products can enter the EU and they must be laboratory tested and accompanied by an analytical report assuring they do not contain Bt63.
“Under EU food safety legislation, only GMOs which have undergone a thorough scientific assessment and authorization procedure, may be put on the EU market,“ said Health Commissioner Markos Kyprianou.
Brussels will review the measure in six months.

LUXEMBOURG,
Feb. 13--The world’s largest steel company, Arcelor Mittal, has reported an annual profit of $10.36 billion (£5.3 billion) for 2007.
The results--in line with analysts’ expectations--are the first full-year figures since the merger of Arcelor and Mittal Steel in June 2006, BBC reported.
It represented a 30 percent increase from 2006 when the steelmaker posted a pro forma net profit of $7.9 billion, AFP quoted the company as saying in a statement. The firm had predicted robust global steel markets would boost its results.
“I am very proud of the way the two companies have integrated so successfully, building a steel company which is focused on leading the transformation of our industry towards a sustainable future,“ said Lakshmi Mittal, president and CEO, in the statement. “Today’s results clearly demonstrate the considerable progress that we are making in this regard,“ he said.
Mittal said the company was “focused on leading the transformation of our industry towards a sustainable future“.
Late last year Arcelor Mittal agreed a deal with controlling shareholders in China Oriental to allow it to eventually raise its stake in the Chinese firm to 73.13 percent. Arcelor Mittal is eager to increase its exposure to China, the world’s biggest producer and consumer of steel.
Mittal bought Arcelor in 2006, creating a firm with 10 percent of the world’s steel market.
The global market for steel has been growing, with especially strong demand from developing countries such as China as they embark on large industrial and building works.

PARIS, Feb. 13--The world oil market could be set for a lengthy slowdown, the International Energy Agency said on Wednesday, signaling a sharp shift in the climate which pushed the oil price to $100 last month.
“Just as the demand shock of 2004 shaped the oil market for the next three years, so too could the pending slowdown,“ the IEA said in its monthly review of oil trends, AFP reported.
Allowing for a weather-related rebound in demand, “the underlying trend is even weaker,“ the agency said. “Changes are taking place in the oil market--not just to demand, but also to the supply side.“
With the price now around $90 per barrel, the IEA said it had revised down demand for 2008 in the light of weaker world growth prospects, and it reported firm supplies in January.
It explained, “An economic slowdown has the potential to change the landscape over the next few years: depending on how deep it is and how long it lasts.“
The IEA cut its forecast for world demand for oil this year by 200,000 barrels per day, saying it expected world demand in 2008 to grow by 1.9 percent instead of 2.2 percent forecast last July.