The US economy is on a solid growth path, with the risk of a double-dip recession "remote", says a survey published today.
Growth in the third quarter is expected to reach a 3 per cent rate and then slip only slightly to a 2.7 per cent rate in the fourth quarter, according to the economists surveyed in the semi-annual report by the National Association for Business Economics. .
For 2003, growth is forecast to strengthen from a 3.3 per cent rate in the first quarter to a 3.8 per cent rate by the fourth quarter.
This is slightly lower than the last NABE forecast in May but is not a radical change.
But the biggest unknown in the survey is not economics but politics.
Despite the strong growth, capital spending is projected to remain in the doldrums though 2003. Poor profits and excess capacity - not a credit crunch or corporate scandals - were cited as the reason for business investment caution.
Inflation is expected to remain tame, hovering just above 2.0 percent, the NABE economists said.
Half of the forecasters said the Middle East was the biggest risk to their forecast, while a smaller percentage cited another terrorist attack.
The only domestic worry was further stock market declines. The survey was completed on September 19th.
AFP