Stronger Economic Growth Anticipated in Long Term
The World Bank had trimmed its 2002 forecast for growth in industrialized countries to 1%-1.5% from an earlier estimate of 2.2%. Meanwhile, U.S. Treasury Secretary Paul O'Neill said Bush administration proposals for stimulating the U.S. economy should bring a rebound in growth next year. The stimulus program includes proposals for at least $60 billion in tax relief to consumers.
In one of the first key measures of economic activity in the wake of the terrorist attacks, auto manufacturers reported a 9.1% decline in U.S. sales in September, but sales were described as "better than expected" by industry observers in light of the uncertainties caused by the attacks.
Two major economic forecasting groups -- the Blue Chip Economic Indicators and the National Association for Business Economics -- reported that special surveys conducted following the terrorist attacks suggest a short-term economic decline in the wake of the attacks. The Blue Chip consensus of economists forecast a decline in gross domestic product (GDP) of 0.7% in the fourth quarter following an estimated 0.5% drop in the third quarter. A return to positive growth is forecast for early next year. A Wall Street Journal survey of economists suggested that the U.S. economy would post negative growth of 0.6% in the third and fourth quarters, but would rebound next year with growth rates of 1.4% in the first quarter and 2.6% in the second quarter.