MercoPress. South Atlantic News Agency

US economy expected to grow 4,2%

Treasury Secretary John Snow addressing the annual conference of the Confederation of British Industry, CBI, in Birmingham anticipated the United States economy would be expanding 4,2% in the last quarter of 2003.

"We're betting on a strong fourth quarter", said Mr. Snow adding that "growth above 4% means good news for the employment market".

The US economy in the third Q expanded a surprising and unexpected 7,2% the highest in 19 years, and more than double the previous quarter 3,3%.

However Mr. Snow pointed out that even when the US economy is beginning to grow at a healthy rate, the rest of the industrialized countries "are below potential, particularly leading nations such as France, Germany and Japan".

Mr. Snow's optimism follows the release of the latest consumer price index which confirms that inflation in the United States remains flat, 2,3% in the ten months of 2003.

This compares with the 2,6% of the same period a year ago.

However the hardcore of the index which includes the more volatile prices of food and fuel did increase 0,2% compared to 0,1% in September.

The US Treasury Secretary before leaving Washington forecasted that in five years time the US budget deficit would "be cut to 2% of GDP; this means reducing the deficit by half".

"Deficits are not welcome, we're not happy about them and it's important to find a remedy", said Mr. Snow.

US budget deficit in 2003 reached 374 billion US dollars, equivalent to 3,5% of GDP, and in 2004 is expected to total 500 billion US dollars.