The White House has lowered its US economic growth forecast for 2008 because of trouble in the housing and credit markets, but said the economy remained resilient and a six-year expansion would continue.
In its twice-yearly forecast, which will be incorporated in the Bush administration's fiscal 2009 budget proposal due early next year, the White House said it now expected real gross domestic product to grow 2.7% in 2008, down from a June forecast for 3.1%.
The forecast was still above the Federal Reserve prediction of 1.8% to 2.5% for 2008. The White House raised its 2007 GDP growth forecast to 2.7% from 2.3%, reflecting surprisingly strong third-quarter growth.
'While the difficulties in housing and credit markets and the effects of high energy prices will extract a penalty from growth, the US economy has many strengths and I expect the expansion to continue,' US Treasury Secretary Henry Paulson said in a statement.
Earlier, official figures showed that the US economy grew at an annual rate of 4.9% in the third quarter. This was ahead of the impact of turmoil in the credit markets.
The expansion was the fastest pace in four years and was fuelled by strong export growth helped by a weak dollar. The figure was in line with most analyst forecasts.
Economists have said the July-September growth figure is less significant as activity is expected to slow in the face of tight credit and a depressed housing market.
