US president says economy is "structurally sound"

Other News Materials 12 February 2008 00:17 (UTC +04:00)

( dpa )- US President George W Bush Monday said the US economy was "structurally sound for the long term" and that the country was dealing with the short-term uncertainties.

Bush made his remarks as he signed the annual White House report on the economy, which looks ahead to the coming year. The report comes amidst fears of a US recession and an escalating financial crisis from the subprime credit crisis.

Bush noted that he expected the economic stimulus plan passed last week by Congress for 160-billion-dollars will address the short-term uncertainties.

"What that means is, it means that money will be going directly to America: workers and families and individuals," he said.

He said the plan also included incentives for American businesses. His spokesman said he plans to sign the plan into law on Wednesday.

Under the plan, most US taxpayers would receive at least a 600- dollar tax rebate check, probably before the end of May. Families could receive as much as 1,200 dollars and an additional 300 dollars for each child.

The Federal Reserve, which sets monetary policy, has warned of slower economic growth for 2008 and has slashed interest rates. The Fed twice cut the key interest rate by a combined 1.25 percentage points to 3 per cent last month.

US growth slumped drastically in the last quarter to 0.6 per cent, raising fears of recession. Growth in the third quarter was a robust 4.9 per cent.

Economists had been bracing for the drop as the US subprime credit crisis continues to wreak worldwide havoc in the financial and banking sectors, but the growth figure was only half of what they had expected.