P.M. BRIEFING : Moderate U.S. Growth Forecast
The U.S. economy is poised to pull out of its current weak spell and grow moderately in 1990 and 1991, but prospects for a further reduction of inflation are dim, the Organization for Economic Cooperation and Development said today.
The Paris-based OECD, a group of 24 rich nations, expects the U.S. gross national product to grow by 2.3% in 1990 and 2.5% in 1991, compared to this year’s estimated expansion rate of 3%.
The semi-annual forecast plants the OECD squarely between the Bush Administration, which is calling for 2.6% growth in 1990, and private forecasters, who on average expect the world’s biggest economy to expand by 1.9%.
Despite the projected slowdown, the OECD believes that the Federal Reserve, the U.S. central bank, will make no headway in its battle to get inflation down to zero.
It is forecasting consumer price inflation of 4.5% in 1990, the same as this year, and an acceleration to 4.7% in 1991.
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