By Max Clarke
The United States’ real GDP growth rate has been revised down yet again, achieving a mean annual rate of 1.3%- well below private sector estimates of 1.8%.
This figure is unlikely to improve in the near future, as markets fearful of the possibility of default delay spending. Forecast GDP figures have been revised down a number of times by the US Department of Commerce, most significantly in 2009 when 0.9% was slashed from the estimate.
"Today’s first look at GDP in the second quarter confirms what we already knew: The economy isn’t growing as fast as it needs to. And every day that we fail to act to lift the debt ceiling and inch closer to default, we threaten our economic progress and job creation," said U.S. Commerce Secretary Gary Locke.
The US’ position as the world’s most powerful economy- comprising some 23% of the World GDP- makes the threat of further decline, or even a return to recession, a serious threat to global fiscal stability.
"Experts have repeatedly warned that if this uncertainty continues, our economy will pay the price. We can’t afford to return to the same failed policies that brought us here. We must build on the progress we’ve made over the last two years and reach a balanced compromise that will reduce our debt and at the same time strengthen our job-creating ability and global competitiveness for the future."
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