Zero growth rate thought possible

Press, Volume CXIII, Issue 33387, 20 November 1973, Page 19

Zero growth rate thought possible

(N.Z. Press Assn. —Copyright) NEW YORK, November 19.

A banker, Mr David Rockefeller, predicted yesterday that if the energy crisis continued it could lead to a zero growth rate for the United States next year and a 6 per cent drop in industrial production.

He said that this could result in an unemployment rate of 6 per cent or more by the end of 1974. The rate now is 4| per cent. Mr Rockefeller said, however, that he did not expect a serious recession, which he defined as “an actual shrinkage in the economy.”

Mr Rockefeller, interviewed on A.B.C.’s “Issues and Answers,” said that the question of whether possible severe fuel shortages could push the United States into a recession was “a very serious oroblem” which was concerning the business community.

He said that the economists’ best estimate was that the energy crisis would bring about a cut of three million dollars a day in the economy’s growth. “This might make the average for next year ... no growth as compared with something closer to 51 per cent for this year,” he said. “As of now we don’t expect

that there will be an actual shrinkage.” A spokesman for Mr Rockefeller, brother of Governor Nelson Rockefeller and chairman and chief executive officer of the Chase Manhattan Bank, said that the predicted drop from a 5| per cent to zero growth in the gross national product was termed a “growth recession” by economists.

He emphasised, however, that Mr Rockefeller’s thinking was that there would not be a serious recession in 1974.

j Questioned about the possi- ; bility of rationing of gasoline ! and/or fuel oil, Mr Rockefeller replied that “although rationing is a very unappetising and inefficient and undesirable kind of thing . . . probably it’s the most equitable . .

He added that he hoped it could be for a relatively short time, “but it would be better to institute rationing in the relatively near future.” Asked if he agreed with the statement by President Nixon that fuel rationing should be a “last resort,” Mr Rockefeller replied: “Well, I would agree with him that it’s a last resort, but I’m not sure that we’re not already there.”

Mr Rockefeller said the oil shortage, a “shortfall” of three million barrels a day, was only beginning “as of right now” because there was oil in the pipeline and the last shipment only arrived last week.