The Reagan administration's forecast for economic growth this year could well be exceeded, Robert G. Dederick, undersecretary of Commerce for economic affairs, said yesterday, citing current evidence of a broadening recovery.
The administration prediction of a 4.7 percent increase in the gross national product, adjusted for inflation, during 1983 "is, in my judgment, well within reach and could, indeed, be exceeded," Dederick told a House Banking subcommittee.
The Commerce official said that the downward revision in real GNP growth from a seasonally adjusted 3.1 percent annual rate in the first quarter to a 2.5 percent rate does not mean the recovery was weak during those months. "Another key measure of cyclical change--a better measure as I see it--is real non-farm business product less the imputed value of owner-occupied housing services," Dederick said. "This broad indicator, which is used by the Bureau of Labor Statistics when computing productivity, rebounded at an annual rate of 6.3 percent."
Since real GNP did grow at only a 2.5 percent rate in the first quarter, reaching the 4.7 percent forecast means that in the second, third and fourth quarters, output will have to increase at an average annual rate of 5.4 percent.
On Wednesday, Larry Kudlow, chief economist at the Office of Management and Budget, said his personal forecast is that growth during the four quarters of 1983 could be as much as 6 percent, rather than the administration's 4.7 percent forecast.
Among private forecasting services using econometric models, Wharton Econometric Forecasting Associates expects a 5.2 percent rise. Townsend-Greenspan & Co. projects only a 4 percent gain, while Data Resources, Inc. puts the figure at 4.7 percent in a forecast it recently revised upward.