White House sees US growth of 3.4pc in 2006

WASHINGTON - The White House projected the US economy would expand by 3.4 per cent in 2006 and would record a growth rate of 3.5 per cent for 2005.

White House spokesman Scott McClellan released the forecast, which will become the basis for the administration's budget, in a briefing with reporters.

"Early indicators of activity suggest that the growth of real gross domestic product, or GDP, during the four quarters of 2005 will be about 3.5 per cent," McClellan said.

He noted that the 3.5 per cent projection for 2005 marked a 0.1 percentage point upward revision from a mid-year prediction the administration gave in June.

"In 2006, real GDP is expected to be similar at 3.4 per cent," McClellan said.

The release of the forecast followed a report on Wednesday from the Commerce Department showing US economic growth in the third quarter was revised up to a brisk annual rate of 4.3 per cent, compared to a previously reported 3.8 per cent pace.

Despite the vibrant growth, many Americans have been anxious about rising oil prices, a factor that has contributed to a slide in President George W. Bush's approval ratings to record lows.

The Bush administration has been eager to highlight reports such as the recent GDP data. Bush is to travel next week to North Carolina to deliver a speech on the economy.

The White House is due to release its fiscal 2007 budget proposal early next year.

- REUTERS