(PTI): Current US budget deficit has reached $1.3 trillion, and could grow to nearly $2 trillion by this fall, intensifying fears about interest rates and inflation.

The figure is nearly $880 billion higher than the deficit registered through July last year. According to the US Congressional Budget Office (CBO), budget spending during the period increased by almost $530 billion, or 21 percent, while incomes shrank by more than $350 billion, or 17 percent, compared with the amounts recorded during a similar period in 2008.

The new figures are likely to fuel Republican opposition to Obama’s plans to reform the US health care system and pass broad legislation to fight climate change.

Republicans in particular blame Obama’s 800-billion-dollar economic rescue package for the growing budget deficit.

Meanwhile, US President Barack Obama declared late Thursday that it would be the beginning of the end of the country’s economic crisis.

“The recession was years in the making, it didn’t just start last month. That bank crisis didn’t happen on my watch. Let’s get the history straight,” he said.

The US President added that his huge $787 billion stimulus plan and other emergency action had stopped the economy’s contraction and reduced the rate of job losses.

The US administration earlier this year forecast that the deficit for the entire year would hit $1.84 trillion in October.