Economists hold out hope for '93 Rosy forecasts warm financiers

January 05, 1992|By Thomas Easton | Thomas Easton,New York Bureau of The Sun

NEW YORK -- Hamburger flippers are hard to find in the tight labor market, home price increases are squeezing young buyers, and mandatory overtime at the car plant is causing tension. Maybe, just maybe, it's OK to consider a large loan for a vacation home.

Reaganesque fantasy? Absolutely. But, conceivably, also a little bit of 1993.

With 1991 a year of destructive restructuring and 1992 beginning amid fear and concern, it may be better to leap over this leap year to 1993, the great hope.

Forecasts are still sliding out of the fax machine, but already they suggest that growth in gross domestic product will exceed 3.2 percent in 1993, said Robert Eggert, head of the Blue Chip survey of 50 leading economists.

Even next year's certified gloomsters are optimistic about 1993's prospects. Economists at J. P. Morgan & Co. predict the economy is contracting now and will continue to do so throughout the first half of the year. But they envision swelling growth during the second half of 1992. For 1993, economists at the bank forecast growth of 3.5 percent.

Still discouraged? A 5,000 Dow, sustainable low inflation, low in terest rates, and a surprising rebound in productivity growth are possible in 1993, predicts Edward Yardeni of C. J. Lawrence Inc. "All we have to do is survive the transition period."

Of course, there may be some bumps along the way. Populism is bad for business, and Congress is bad for business, Mr. Yardeni said. And both are likely to be unusually active in this election year.

Among the truly optimistic, David Bostian, an economist with Josephthal, Lyon & Ross Inc., contends economic growth in 1993 will reach 4.5 percent (though he, too, fears political problems and a derailment of free trade policies).

How about another depression? "No way, unless economic policy is truly deranged," Mr. Bostian said.

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