WASHINGTON (AP) - Top business economists Thursday predicted
that economic growth will slow dramatically this year but the nation
should be able to forestall a recession until at least 1990.
The consensus of 54 forecasting experts surveyed by the National
Association of Business Economists was that America will experience
a ``growth recession,'' in which the economy continues to expand but
at a very slow pace.
The slowdown is expected to be accompanied by a moderate
increase in unemployment and higher inflation due to an emerging
upturn in food and energy prices, according to the association's
latest quarterly survey.
1990 continues to be the year economists predict a recession
will arrive. Forty-three percent predict a downturn then, while 20
percent expect record peacetime expansion to end this year.
That projection is slightly more optimistic than the group's
last quarterly forecast, issued in February, when 75 percent of
those surveyed expected a recession this year or next.
In Thursday's survey, 17 percent forecast a recession for 1991
and 20 percent said it would be 1992 or beyond before a downturn
Recent government reports measuring the economy's performance so
far this year have suggested that growth is slowing in response to a
Federal Reserve campaign to engineer a so-called ``soft landing,''
in which the economy slows enough to cool inflation without slipping
into a recession.
But the forecasters warned that ``the real trick from an
economic policy perspective is preventing the forces that are
responsible for a major slowdown from degenerating into a fullblown
``Soft landings have often appeared possible ... but inflation
has invariably worsened,'' the group said in a summary of its
findings. ``With the run-up in prices, government policy has been
forced to squeeze still harder and soft landings are lost in the
The analysts' median forecast was that the gross national
product, the broadest measure of the economy's health, would grow at
an sluggish annual rate of 1.3 percent during the final three
quarters of 1989.
For the year overall, the GNP was forecast to grow 2.8 percent,
down from 3.9 percent in 1988. Growth was expected to slow even
further in 1990, dropping to 1.8 percent.
That prognosis is considerably more pessimistic than the Bush
administration, which is pinning its budget and deficit-reduction
plans on GNP growth of 3.2 percent this year and next.
The government reported Thursday that the GNP grew at a 4.3
percent annual rate in the first three months of 1989, much slower
than previously thought. …