The Carter administration all but conceded yesterday that it is braced for an Organization of Petroleum Exporting Countries price boost later this year of 10 percent to 15 percent over the $23.50 ceiling it set last July.
Richard Cooper, under secretary of State for economic affairs, said that such a raise "has already been built into forecasts" for a cloudy world economic outlook in 1980.
The general forecast is for recession in the United States and Britain, and for a slowdown in the rest of the industrialized world where real economic growth is expected to be no more than 1 percent.
Cooper's remarks were made in a question-and-answer session following a luncheon address to the third annual U.S. Europe-Japan economic editor symposium.
He was asked whether an OPEC-wide increase along the lines of individual boosts announced in the past several weeks by Nigeria, Kuwait and Mexico and on Monday by Libya would push the world into negative growth in 1980. Cooper said no, adding that another 10 percent to 15 percent price increase already was assumed in the official forecasts forecasts.
But anything beyond that would have a depressing effect, he acknowledged. He also conceded that many private economic forecasts here and abroad already "are considerably more pessimistic" than the official line.
Administration officials concede that their hopes for beating back inflation are keyed to energy prices.In testimony before the Joint Economic Committee yesterday, Treasury Secretary G. William Miller repeated the administration's belief that much of the U.S. inflation problem has been caused by a cumulative 60 percent OPEC price boost between the end of 1978 and mid-1979.
The main theme of Cooper's prepared remarks, in fact, was that energy policy "has now become an integral part of macroeconomic policy."
He said oil "has now become a global bottleneck to economic recovery, and that puts the world in a real dilemma that it hasn't encountered before." If the private forecasts for a steeper economic decline next year prove correct, the normal macroeconomic response to move toward stimulus may be inhibited either by oil shortages or prices, he said. Thus, he argued, sustained economic growth depends heavily on conserving energy and finding substitutes for oil.