The annual budget deficit will fall to $468 billion in fiscal 2015, the lowest level of President Obama’s tenure, the Congressional Budget Office (CBO) reported Monday.

Lower government spending and the improving economy are driving down the annual deficit, the CBO reported, with the shortfall for the year projected to be 2.6 percent of gross domestic product (GDP), the lowest level since 2007.

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The CBO projected that the economy will grow at an annual rate of 2.9 percent over the next two years and by 2.5 percent in 2017, with unemployment falling to 5.3 percent by the end of 2017.

The new CBO projections provide some good news for Obama, whose approval rating has reached 50 percent partly on the strength of the economy and falling gas prices.

"The estimates released today by CBO once again confirm the progress we’ve made in bringing down deficits and expanding access to healthcare under the Affordable Care Act," said White House deputy press secretary Eric Schultz in a statement, touting the new numbers.

"Under the President’s leadership, the deficit has already been cut by about two-thirds as a share of the economy, the fastest sustained deficit reduction since World War II," he continued.

"CBO’s longer-term budget and economic projections confirm the need for Congress to act to strengthen our economy for the middle class while putting our debt and deficits on a sustainable trajectory, including by making the investments that will accelerate economic growth and generate good new jobs for our workers to fill."

Still, while the job market is improving, wage growth “has been a good deal lower” since it was before the recession, CBO Director Doug Elmendorf said at a briefing Monday.

“We think compensation growth will pick up,” he added, as participation in the labor market increases and employers are pressured to offer higher salaries.

And while the deficit is shrinking now, the nation’s debt load is steadily increasing. By the end of September, the CBO estimates U.S. debt will be 74 percent of GDP — more than twice the level at the end of 2007 and higher than in any year since 1950. By 2025, the office projects debt will rise to nearly 79 percent of GDP.

“This ‘new normal’ is unacceptable, and it will mean less opportunity for American families and job creators now and in the years to come,” House Budget Committee Chairman Tom Price (R-Ga.) said in a statement.

The debt is expected to rise because the government will need to borrow more money from the Treasury Department to cover federal spending. In 2015, for example, the government will need to borrow $112 billion to finance new student loans and other credit programs, the CBO said.

Furthermore, over the next decade, the government will need to borrow about $60 billion more each year than projected deficits suggest.

Debt will continue to rise through 2039, the budget office said, putting the nation on a path that is “unsustainable.” In order to avoid a crisis, it warned, Congress must make “significant changes to tax and spending policies.”

The release of the projections came at an awkward time for Elmendorf, who continues to serve as agency director despite his term’s expiration.

Republicans are weighing whether to keep Elmendorf as leader of the influential office, with voices on the right pushing for a new director who might be more amenable to “dynamic scoring” that takes into account the impact of tax cuts on the economy.

The CBO report contained several other findings, including the prediction that Congress will have to raise the debt ceiling around September if Treasury is forced to use “extraordinary measures” beginning in March.

ObamaCare’s insurance coverage provisions would cost $76 billion in 2015 and $1.3 trillion over the next decade — $101 billion less than the agency’s last estimate and 20 percent less than initial projections in 2010.

Updated at 8:08 p.m.