US business to offset sequester: report THE federal government agency that assists businesses with their exporting activities does not believe the United States will sink back into recession because of its sharp budget spending cuts. The Export Finance and Insurance Corporation (EFIC) expects a revival in the private sector of the world's largest economy will offset the fiscal drag from the so called 'sequester' which saw billions of dollars of spending cuts automatically introduced on March 1. It cites in its monthly World Risk Developments report off-setting factors to the sequester as; lean business inventories, a marked strengthening of household balance sheets, a recovery in housing and improved credit availability. "Together these are giving the private sector an impetus that should more than offset the headwinds from the sequester," EFIC chief economist Roger Donnelly said in a statement. However, the US economy does face another fiscal cliff in May when the debt ceiling must be raised again. "But another round of brinkmanship similar to the one in August 2011, which cost the United States its AAA rating, seems less likely," Mr Donnelly said. In contrast, the EFIC report says the failure of political parties in Italy to form a majority government following the election in February has sent a clear message that voters oppose austerity. This suggests that Italy may struggle to meet its obligations to activate the European Central Bank's bond-buying facility, known as the Outright Monetary Transactions (OMT) facility. The central bank's OMT has enabled Italy's bond yields to decline, containing the government's borrowing costs, despite a slumping economy and rising public debt.