The Securities Industry and Financial Markets Association reports that total net Treasury securities issuance is expected to be $125 billion during the first quarter of this year, higher than last quarter and a year ago.

The $125 billion forecast for net new issuance of Treasury securities is almost triple the $34 billion issued last quarter. It is also 56% higher than the $80 billion dollars issued during the first calendar quarter of 2007.

SIFMA said the projected rise of net issuance is consistent with an anticipated jump in the fiscal 2008 federal budget deficit brought about by the slowing economy.

“We are expecting slower economic growth for much of the year as the financial system works through the housing market downturn and credit market issues,” said Michael Decker, senior managing director and head of research and public policy at SIFMA. “A slowing economy hurts the government’s fiscal position by lowering tax receipts and puts pressure on spending programs, causing a rise in borrowing.”

The median forecast projects the 2008 budget deficit to be $228 billion, higher than the fiscal 2007 deficit of $162.8 billion.