Snow says economy to grow well
LONDON (Reuters) – The U.S. economy will grow by about 3.5
percent this year as its recovery continues and expands, U.S.
Treasury Secretary John Snow said on Wednesday.
“We are in a very good position to see this good recovery
continue and expand with growth rates for ’06 that are in the
3.5 percent range for GDP and with strong job creation,” he
told BBC radio.
Snow said the United States remained committed to cutting
the country’s budget deficit and was confident it would achieve
goals set by President George W. Bush.
“We remain committed to bringing the deficit down, we are
confident we will,” Snow said.
The United States’ deficit in the fiscal year to the end of
September was $318.62 billion, down from a record $412.85
billion in the previous year, but still large enough to loom
over mid-term elections this year.
“The president has said he wants to bring the deficit down
to a level that will in effect cut it in half over his time in
office for the last five years. That would bring it to a level
which is below 2 pct of GDP, low by historical standards,” Snow
He said inflation was subdued, a fact reflected by
relatively low U.S. long-term interest rates, and that he did
not really expect the economy to cool in 12-18 months time
following a cycle of interest rate rises.
“And all of that I think against a backdrop of inflation
well in check. So we are looking for continued very good
performance from the American economy,” Snow said.
“I point out that (interest rates) are pretty modest. The
long-term interest rates in the Unites States are still pretty
low by historical standards and I think that reflects the
absence of inflationary expectations,” he said.
“In the United States we are blessed that yes we do have
strong consumer spending but we also have very strong capital
goods investment,” he told the BBC.