Business Panel Sees Stagnation

Top business leaders predicted today that the U.S. economy will stagnate during the second half of this year. A minority said a recession is here or on the way.

The Business Council’s fall forecast projected a nearly imperceptible 0.3% economic growth rate in the second half of 1990, and said oil-driven inflation will climb to 6.1% before falling back below current levels.

One-fourth of the corporate economists preparing the report foresee a recession, a minority supported by several of the Business Council members.

“As far as I’m concerned, we’re in a phase of a recession,” said Edmund T. Pratt Jr., chairman of Pfizer Inc.

Asked whether he believes that the nation was in a recession, Lewis T. Preston, chairman of J. P. Morgan & Co., replied: “I do.”

The outlook for a short boost in inflation is based on the assumption that there will be no war in the Persian Gulf.

The forecast was presented to the 100 leaders of the nation’s top corporations at their semiannual, two-day meeting at this mountain resort.

Preston, a council vice chairman, noted major differences between the council’s forecast last spring and the current one.

The projections prepared by the 19 corporate economists for the May meeting predicted 2% economic growth in the second half of the year and 2.5% in 1991. The current expectation foresees 0.3% growth in the second half, 1.2% in the first half of 1991 and 2.6% in the second.