The U.S. economy will remain sluggish, with GDP growth between 2% and 2.5%, Atlanta Federal Reserve Bank President and CEO Dennis Lockhart said Tuesday, in line with the 2.1% average since the recession started.

"For 2013, I'm forecasting a continuation of this basic picture. I expect full-year GDP growth to be between 2 and 2 1/2 percent. I could be wrong, but I don't expect 2013 to be a breakout year," he told business students at the Instituto de Empresas in Madrid, Spain, according to text released by the Fed.

In addition to slow growth, employment remains weak. Lockhart said the solution to these problems require "greater entrepreneurship, more new business formation, and more investment in innovation."

Policymakers, he said, need to "remove obstacles to growth" -- he mentioned "uncertainty regarding the fiscal path of government, policies that discourage new business formation, and disincentives to invest" -- and set "positive, pro-growth policies," including "investment in human capital and critical infrastructure."

"And finally, there is a role for monetary policy," Lockhart said. "In my view, monetary policy can deliver appropriately favorable interest rate conditions, always in a context of low and stable inflation. Monetary policy plays a critical role in creating the most favorable conditions for other policy actions to do their work."

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