The US economy will continue growing this year and avoid a recession despite a lingering housing slump and a related credit crunch, White House economists predicted on Monday.
The annual Economic Report of the President said the world's largest economy had absorbed shocks in the past and that Congress's approval of a giant economic stimulus plan last week would help fire up growth.
"Economic growth is expected to continue in 2008. Most market forecasts suggest a slower pace in the first half of 2008, followed by strengthened growth in the second half of the year," the annual survey said.
It forecasts that US gross GDP would remain at 2.7 percent this year compared with a similar assumption for last year, and sees growth accelerating several notches to 3 percent next year.
The White House projections contrast with forecasts by some private economists, some of whom believe that the world's richest nation is on the cusp of or has already fallen into a recession.
"This report indicates that our economy is structurally sound for the long term and that we're dealing with uncertainties in the short term," President George W. Bush told reporters at the White House as he endorsed the annual assessment.
The White House report, however, cautioned that the troubles roiling the mortgage and credit markets could hamper growth.
"The contraction of the secondary market for some mortgage securities and the ensuing write-downs at major financial intermediaries are a new downside risk," the report cautioned.
White House economists said the downturn in the housing market had not spilled over into the wider economy as of the end of last year.
Bush is due to sign the economic stimulus plan, which is valued at about US$150 billion and includes temporary tax rebates and business incentives, into law today.
"I'm so pleased that the Congress and the administration worked closely together in order to pass a robust pro-growth package to deal with the uncertainties," Bush said. "I'll be signing this bill soon."
Aside from the economic aid package, the report also underlined action taken by the US central bank to give growth a shot in the arm.
"The Federal Reserve provided liquidity and took measures to support financial stability in the financial markets in the wake of the disruptions in the credit markets," the report stated.
US growth slowed to a 0.6 percent annualized crawl in the fourth quarter compared with a blistering 4.9 percent clip in the prior quarter, despite the Fed unleashing a sustained rate-cutting campaign in September.
The central bank has slashed its key federal funds short-term interest rate to 3 percent in recent weeks in a bid to underpin economic momentum.
The White House assessment echoed remarks made by Treasury Secretary Henry Paulson in Tokyo on Saturday.
"I believe that we are going to keep growing. If you are growing, you are not in recession, right? We all know that," Paulson said after a meeting of finance chiefs from the G7.
The report also forecast that inflationary pressures would cool this year with the consumer price index (CPI) moderating to 2.1 percent from an expected 3.9 percent last year.
The CPI is forecast to tick up to 2.2 percent next year.
On the job front, the unemployment rate is anticipated to rise to 4.9 percent this year and hold steady next year, compared with a predicted 4.6 percent for last year.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique