December 1, 2005

Economy to grow 3.4 pct in ’06: White House

WASHINGTON (Reuters) - The White House projected on
Thursday the U.S. economy would expand by 3.4 percent in 2006
and would record a growth rate of 3.5 percent 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 percent," McClellan said.

He noted that the 3.5 percent 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
percent," McClellan said.

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