Federal Reserve Board Chairman Paul A. Volcker said yesterday that Congress does not have to reach the budget-cutting targets contained in the Gramm-Rudman-Hollings deficit-reduction bill as long as legislators make a serious effort to do so.

Volcker also testified before the House Banking Committee that the Federal Reserve Board does not expect the sluggish U.S. economy to nose dive into a recession. But he said that if the nation does not begin to sell more products overseas within a year, the economy could well sink into a recession.

He acknowledged that the steep decline in the value of the dollar in the last year has made the price of U.S. exports less expensive in Europe and Japan. "But it takes more than exchange-rate changes" to produce changes in the massive U.S. trade deficit. "It depends on the strength of markets abroad."

The Reagan administration has been pressing West Germany and Japan to take steps to boost their economic growth in order to reduce the amount of goods they are selling abroad, rather than at home, and to stimulate consumer and business demand for U.S. products.

Volcker acknowledged that many countries fear that in rekindling their economies, they run the risk of rekindling inflation as well. But the central bank chief said that the chance of a resurgence of inflation is small, and made smaller by the steep decline in oil prices.

He said other countries themselves should find it in their best interests to take steps to boost buying. During the past three years, when the United States was growing at a fast clip, this country was a major purchaser of products made in Europe and Japan. With U.S. economic growth down to a 1.1 percent annual rate, this nation no longer can be the source of growth for Europe and Japan.

Instead, those countries should not only boost demand for their own goods, but also for U.S. products in the process.

Volcker said that a policy of easier money would not necessarily help nudge the U.S. economy out of its doldrums, in large part because the United States is so heavily dependent upon its trading partners.

The Fed chairman, under questioning, said that because growth is slower than anticipated, it will be difficult for Congress to reduce next year's deficit to the $144 billion required by the deficit-reduction act passed last year.

Because economic growth is lower than anticipated, tax revenues will be lower and some expenditures will be higher than anticipated. Volcker said that it is not "economically significant" if lawmakers do not reduce the difference between revenue and expenditures to $144 billion for the federal spending year that begins on Oct. 1.

Volcker also said that he would consider pressing President Reagan to take steps to raise taxes if the administration and Congress do not find ways to reduce the deficit by cutting spending. Volcker has long held that cutting spending was preferable to raising taxes to reduce the deficit, but has testified for years that whatever method Congress uses, it must reduce the deficit.

He said that the United States cannot expect to rely forever upon foreign investors to finance the nation's deficit. In fact, Volcker said, foreigners have been willing to finance U.S. investment needs far longer than he expected.

Volcker said that even though the targets in Gramm-Rudman-Hollings may be too ambitious for fiscal 1987, Congress should not abandon the notion of gradually reducing the imbalance between revenue and expenditures by setting budget targets because the targets provide the discipline Congress needs to remain serious about deficit reduction.

He also said that U.S. growth is also being retarded because tax reform is pending. Many companies are holding up investments until they know how the new law will affect them, Volcker testified.

The Fed and Volcker have been criticized for not taking steps to further reduce interest rates to make credit cheaper. Yesterday, Senate Budget Committee Chairman Pete V. Domenici (R-N.M.) called on Volcker to take steps to lower interest rates. Domenici, echoing a call last week from Senate Majority Leader Robert J. Dole (R-Kan.), said that the chance of a full-scale recession is greater than that of inflation and said that the Fed must take steps to stimulate the economy that "entail some inflation risk."

In another development, the Senate Banking Committee yesterday approved the nomination of Federal Reserve Governor Manuel H. Johnson to be vice chairman of the central bank. His nomination will go to the Senate floor for confirmation.