Washington, Sep 2 (IANS/EFE): The White House Office of Management and Budget revised downward its forecast for US economic growth, which now stands at 1.7 percent this year and 2.6 percent in 2012, and it predicted that unemployment will remain at about 9 percent.

These figures were produced for OMB's Mid-Session Review and represent a noteworthy reduction with respect to what had been forecast in February, when the White House predicted gross domestic product would grow 2.7 percent in 2011 and 3.5 percent next year.

The document cites as causes for the relative economic weakness the increase in petroleum prices, the slowing of the European economy and the fragile recovery of the US real estate market.

OMB director Jack Lew said that the report "underscores that we need to get back on a sustainable fiscal path and that we also need to invest in long-term economic growth and job creation".

Unemployment, one of the main concerns of Americans and the main issue President Barack Obama will discuss in his Sep 8 address to Congress, is projected to remain at 9 percent through the end of 2012.

The positive piece of data is that the Obama administration had reduced the federal deficit for this year to $1.3 trillion, or 8.8 percent of GDP, compared to the $1.65 trillion estimated previously, especially thanks to the reduction of public spending, such that in 2012 the deficit will amount to just 6.1 percent of GDP.

Inflation is expected to increase to 2.8 percent in 2011, compared with the February forecast of 1.3 percent.

For 2012, however, the government is maintaining its estimate that inflation will be 1.8 percent.

The White House thus joins the Federal Reserve in its recent less-favourable-than-expected predictions after the latter also reduced its estimates for US economic growth because of a "slower than expected" recovery.