NEW YORK, Oct 25: Dented by the Sept. 11, attacks just when it was struggling to regain its footing, the mammoth US economy will slump into a brief recession before bouncing back next year, according to a Reuters quarterly poll of economists released on Wednesday.

While acknowledging the difficulties of making predictions in the current post-attack environment, economists on average said the US economy would likely shrink during the third and fourth quarters of 2001, putting it in its first recession in a decade. Gross Domestic Product, or GDP, should contract at a 0.1 per cent annual rate from the fourth quarter a year ago.

But they see a rebound taking hold by next spring.

Once the economy starts moving in the right direction again, it will start growing quite forcefully, said Doug Porter, senior economist at BMO Nesbitt Burns in Toronto.

Anticipated rate cuts from the Federal Reserve — on top of nine easings so far this year — along with fiscal stimulus from Washington, are likely to ratchet up growth to the 3.0 to 4.0 percent range by the second half of next year, according to the poll.

There’s a tremendous amount of monetary stimulus that was put in the system earlier this year, which I think is already helping, said Peter Kretzmer, senior economist at Banc of America Securities in New York.

Fed Chairman Alan Greenspan has said that while near-term risks to the economy remain, an aggressive easing campaign has probably warded off what could have been a far worse economic downturn following the Sept. 11, attacks.

The poll of 25 economists, surveyed from Oct. 9-18 in the United States and Canada, showed private sector views are in line with those of top White House economic aides Lawrence Lindsey and Mitchell Daniels, the US budget chief. Both said last week the US economy would likely log two quarters of contraction before recovering.

The survey also corroborates the view of the private Blue-Chip survey of economic forecasters published last month which showed most analysts expect only a temporary setback, to be followed by a return to growth early next year.

The crystal ball got cracked, said David Wyss, chief economist at Standard & Poor’s.

The main risk here is toward the downside, said Joseph Abate, senior economist at Lehman Brothers.

Growth next year is seen at 2.7 per cent measured on a fourth-quarter over fourth-quarter basis, compared to expectations for 3.0 per cent just three months ago, and slightly less than the 2.8 per cent pace seen in 2000.

With the economy slumping, analysts expect the unemployment rate to rise, peaking at 5.8 per cent in the second quarter up from 4.9 per cent now, before easing back as the economy kicks back into high gear.—Reuters