WASHINGTON, Jan. 23 (UPI) -- The top economic forecaster for the U.S. Congress said Wednesday he believes the United States is entering a slow-growth period, but will avoid a recession.
Peter Orszag, Congressional Budget Office director, projects that a slowing economy will increase the deficit, predicted to rise to 1.5 percent of the gross domestic product in 2008 from 1.2 percent in 2007.
"Enactment of legislation to provide economic stimulus or additional funding for military operations in Iraq and Afghanistan could further increase the deficit for this year," Orszag testified before the House Budget Committee.
The economy slowed last year, "and there are strong indications that it will slacken further in in 2008" because of problems in the housing and financial sectors and high energy prices, he said.
The good news is the CBO does not expect "the slowdown in economic growth to be large enough to register as a recession," Orszag said.
He said the office expected the economy to rebound after 2008 "as the negative effects of the turmoil in the housing and financial markets fade."
