ECONOMY OF U.S.

Press, Volume CXV, Issue 33783, 4 March 1975, Page 20

ECONOMY OF U.S.

Differences of opinion t.V.Z P A. Staff Correspondent WASHINGTON The Ford Administration appears to be bending over backwards to give a bleak outlook for the American economy during the remainder of the decade The First National City Bank of New York says in 'its latest newsletter that the Administration expects an 11 per cent rise in price levels this year, followed by a 7.5 i per cent rise in 1976. “Years of high unemployment not withstanding, the Administration expects the rate of inflation to level out at around 4 per cent by the final year of the decade—still well above the experience of most of the ’6os,” the bank says. “By contrast, most private forecasters think that inflation will be in the 8 to 10 per cent range this year, with a correspondingly higher rate of real’ growth. That is because the doublebarrelled effect of declining demand and lower supply costs is expected to squelch the rate of inflation more decisively than the official projections imply.

“Moreover, those official estimates assume that the President’s proposed price increases on petroleum will fully win Congressional blessing—an unlikely prospect, at least.”

The bank adds that it has been calculated that if the economy were operating at 4 per cent unemployment, and all the proposed energy taxes were exacted, the Budget would be in surplus.