Economists chop 2003 GDP forecast

A top panel of economists yesterday slashed its forecast for U.S. economic growth this year, saying the threat of war with Iraq has dampened consumer spending and business activity.

The Blue Chip Economic Indicators panel of forecasters said it expected the U.S. gross domestic product to expand at at a rate of 2.6 percent in 2003.

The prediction was down from a rate of 2.7 percent projected in February and 2.8 percent forecast in January.

The reduction was based on the belief that economic growth in the first half of the year would be weak, given signals that Washington is poised to go to war with Iraq.

Other factors, such as snowstorms on the East Coast, have also depressed growth during the early part of the year.

The panel projected a growth rate of only 2.2 percent for the first quarter of this year, a reduction of four-tenths of a percentage point from the 2.6 percent projected in February.

The group also reduced the second-quarter GDP growth prediction by four-tenths of a percentage point by 2.8 percent.