President <a href="https://www.thenationalnews.com/tags/joe-biden" target="_blank">Joe Biden</a>'s administration expects a cooler US economy and higher borrowing costs this year, as White House economists provided a less optimistic view on <a href="https://www.thenationalnews.com/tags/interest-rates" target="_blank">interest rates</a> for borrowers. The economic assumptions, published on Monday as part of Mr Biden's proposed budget for fiscal year 2025, estimates the US economy will increase by 1.7 per cent this year, well below the International Monetary Fund's projection of 2.1 per cent. Still, that would outperform the UK and EU, whose central banks expect borrowing costs to remain elevated for some time. The forecasts were completed by White House economists in November, before data showed the US gross domestic product had grown by 3.1 per cent in 2023. “In light of the new data available since we formulated our assumptions, a forecast for 2024 assembled today would likely be stronger than we assumed in November,” the White House said in a statement. The White House also expects <a href="https://www.thenationalnews.com/business/economy/2024/02/13/us-inflation-rises-more-than-expected-in-january/" target="_blank">inflation</a> to remain stubbornly above 2 per cent this year. The Consumer Price Index is expected to increase 2.9 per cent this year before falling to 2.3 per cent in the years following, still elevated above the Federal Reserve's 2 per cent target. Monday's budget did not include projections for the Personal Consumption Expenditures Price Index, which the Fed prefers when measuring inflation. The Fed is scheduled to update its own economic projections next week while also laying the path for its monetary policy decisions. Mr Biden's budget also showed the White House holds a less optimistic view on borrowing costs than they did in 2023. Last year, the White House predicted three-month Treasury bills and 10-year notes to average 3.8 per cent and 3.6 per cent, respectively, in 2024. The White House now expects three-month Treasury bills to average 5.1 per cent and 10-year notes to average 4.4 per cent. The White House also expects unemployment to rise to 4.0 per cent this year, in line with economists' projections. The unemployment rate in the US has been below 4 per cent for nearly two years.