Rebound Possible in Mid-1991, Bush Aide Says : Economy: Michael J. Boskin says it will depend on whether oil prices have dropped. That, in turn, hinges on a resolution of the Middle East crisis.

The White House’s chief economic adviser said Sunday that the economy probably will rebound from its current slowdown by the middle of next year--if oil prices decline.

A drop in oil prices, however, depends on a resolution of the Persian Gulf crisis, Michael J. Boskin said on Cable News Network.

Oil prices have doubled since Iraq’s Aug. 2 invasion of Kuwait. The energy shock has driven the inflation rate up to 6.7% this year, the highest in six years.

While many economists say the economy is beyond the “slowdown” stage, Boskin repeated his view that it is too early to tell if the United States has entered its first recession in eight years.

“The oil shock will cause difficulties in the economy, especially in the fourth quarter this year and early next year,” Boskin said.

“But the overwhelming bulk of forecasters believe the economy will merely skirt a recession or, if we have one, it will be brief and rather mild, and we will be out of it sometime within the middle of next year,” he said.

A usually optimistic President Bush for the first time last week said he is concerned that the economy is in a downturn and that the Gulf crisis will affect its recovery.

In an interview Sunday on NBC-TV, Commerce Secretary Robert A. Mosbacher was more upbeat.

“I think it is too early to come to that conclusion. We have a lot of down sides. But we still have some up sides,” he said, pointing to strength in the agricultural, medical supplies, chemicals and pharmaceutical sectors.

The economy has enjoyed unusual peacetime expansion since 1982. But growth this year has virtually ground to halt.

Unemployment is up to 5.7% from 5.3% a year ago. The number of jobs is shrinking. Factory output is stagnant. New-home construction is at recession levels, and the retail sales outlook is grim for the holiday season.

Reflecting these difficulties, the gross national product, a measure of overall economic output, grew for the first nine months of 1990 by only 1.3%, down from 2.3% for the same period a year ago.

Boskin said he expects oil prices to fall by mid-1991 once the Middle East crisis has been resolved, aiding recovery.

Many economists forecast crude prices next year of $25 a barrel, down from $31.90 a barrel in the spot market at Friday’s close. Prices this fall reached a high of $40 a barrel on war fears, compared to $18 before the Gulf crisis began.

In the meantime, oil prices are taking their toll.

“Oil will probably subtract approximately 1%, perhaps a little more, from GNP growth in the next couple of quarters,” Boskin said. “It is causing prices to be higher, inflation temporarily higher.”