'This report indicates that our economy is structurally sound for the long term and that we're dealing with uncertainties in the short term,' Mr Bush told reporters after signing his annual economic report to Congress.

The report did not alter the White House forecast that the US economy would grow 2.7 per cent in 2008, a far rosier picture than that painted by private-sector economists who have predicted growth of just 1.6 per cent this year.

Economists surveyed by the Blue Chip Economic Indicators newsletter released earlier on Monday also pegged the chances of a recession at almost 50 per cent.

White House economic adviser Edward Lazear defended the administration's forecast as still 'realistic' because a US$152 billion (S$216.6 billion) fiscal stimulus package and Federal Reserve interest rate cuts would boost growth in the second half of the year.

'I don't think we are in a recession right now, and we are not forecasting a recession. We are forecasting slower growth,' Mr Lazear, chairman of the White House Council of Economic Advisers, told a news briefing.

White House economists see no recession in 2008 WASHINGTON - THE US economy will continue growing in 2008 and avoid a recession despite a lingering housing slump and a related credit crunch, White House economists predicted on Monday. The annual 'Economic Report of the President' said the world's largest economy had absorbed shocks in the past and that Congress's approval of a giant economic stimulus plan last week would help fire up growth. ... more

In a rare show of bipartisan cooperation, the Democratic-led Congress and the Republican White House in less than a month hammered out the stimulus package that offers tax rebates and business incentives in the hope of warding off a recession.

Mr Bush will sign the package on Wednesday, and the rebate checks will likely start going out in May. 'It's going to help deal with the uncertainties in this economy,' the president said.

Mr Lazear brushed aside suggestions that further economic stimulus may be needed beyond what was approved by Congress last week, even as some Democratic lawmakers have called for additional action such as extending jobless benefits.

Democratic Senate Majority Leader Harry Reid, of Nevada, said much more was needed to address what he described as the economy's longer-term problems.

Mr Bush's report also called on Congress to adopt reforms to boost refinancing in the slumping housing sector and approve free-trade agreements with Colombia, Panama and South Korea. -- REUTERS