The macro situation in the US and what it means for 2005

Prospects for US real GDP growth remain encouraging during the first half of 2004, supported by tax breaks and an ongoing recovery in business investment. For the first half of 2004, growth of 5% is expected. However, uncertainty clouds the outlook for late 2004 and 2005. SG Private Banking (Asia Pacific) expects 2004 average growth to stay at 4.7%, but to slow just below potential in 2005 as the impact of past policy stimulus wanes and negative effects from rising interest rates gradually emerge. SG Private Banking (Asia Pacific) believes that 2005's US GDP growth will be forecast at 2.9%.