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U.S. GDP Growth Estimates Cut at Citigroup on Fiscal Concern

The U.S. economy may expand less than previously forecast in 2011 and 2012 because of potential “political paralysis” and fiscal tightening steps, Citigroup Inc. wrote in a report.

The brokerage cut its 2011 gross domestic product growth forecast to 1.6 percent from 1.7 percent and lowered its 2012 GDP growth estimate to 2.1 percent from 2.7 percent, Steven Wieting and Shawn Snyder, analysts at Citigroup, wrote in a report dated yesterday. They also trimmed their estimates for the Standard & Poor’s 500 Index’s earnings-per-share this year to $97 from $98, and to $101 from $105 next year.