The United States should enjoy solid growth despite high oil prices, but a new interest rate rise by the Federal Reserve is not excluded, the Organisation for Economic Cooperation and Development (OECD) said on Tuesday.

In its biannual economic outlook, the OECD revised up the US growth for 2005 at 3.6 percent after 4.2 percent in year 2004.

It predicted US growth at 3.6 percent for 2006, instead of 3.3 percent in its previous forecasts, and 3.3 percent growth for the year 2007.

The OECD noted that the resilience of the US economy "remains to be fully tested". Hurricanes Katrina and Rita, which devastated parts of New Orleans and the Gulf of Mexico in August and September, are likely to shave half a point off GDP (gross domestic product) growth in the second half of 2005, but the economy should be sustainable by expenses on re-establishment and reconstruction, said the report.

The encouraging situation in the United States would be explained by a low level of inflationary anticipation, great market discipline under foreign competition and also a new fall in the structural unemployment rate, according to the OECD.

However, it also warned that "substantial uncertainty", especially inflationary risks, still existed due to high oil prices.

The US Federal Reserve, which has this year taken a measured approach in tightening monetary policy, may yet have to step up the pace "and turn restrictive should energy prices start being built into underlying inflation", the OECD said.

In the United States, long-term interest rates would rise, which would curb global momentum, according to the report.

The budgetary situation has been improved thanks to the strong increase of income, especially from tax on firms, while deficit in the US current account, according to the OECD, should come to a record 7 percent of its GDP in 2007 after 6.5 percent in 2005 and a projected 6.7 percent in 2006.

Source: Xinhua