President Carter went out of his way yesterday to praise U.N. Ambassador Andrew Young, predicting that Young will become a hero to the people of Third World nations.

With Young still in Africa and absent for the meeting, the President told a regular weekly Cabinet meeting at the White House, "There is no doubt in my mind that over a period of time Adny Young will become a hero to the Third World."

He added that Young "speaks courageously and convincingly about the problems of all people" and is "establishing the proper relationship with developing countries on the issues of race and human rights."

Earlier yesterday, Carter signed a bill that will provide about $34 billion in individual and business tax cuts over the next three years and another measure to provide up to $175 million in loans and grants for emergency drought relief.

In a bill-signing ceremony in the White House Rose Garden, the President made no mention of the $50 tax rebate plan which he later withdrew, nor of the business tax cuts that remained in the bill over his objections.

Carter's remarks about Young, relayed to reporteres by White House deputy press secretary Rex Granum, were clearly designed to reiterate the President's personal support of the sometimes controversial U.N. ambassador as Young nears the end of a tour of Africa.

In an emotional series of meetings with groups of South African blacks and whites in Johannesburg Sunday, Young spoke movingly of his own experiences in the American civil rights movement, warned that white South African leaders have "met their match" in Carter and ended up singing the African nationalist anthem with Zulu tribal chief Gatsha Buthelezi.

From the beginning of the Carter administration, Young has been one of the most outspoken and controversial figures around the President, with his statements often seeming to conflict with or at least go well beyond the more cautious views of other foreign policy advisers. But Carter has always publicly supported him, as he did yesterday at the Cabinet meeting.

According to Granum, the President told the Cabinet that Young has his "complete faith" and has also developed "a good working relationship" with Secretary of State Cyrus R. Vance and other foreign policy advisers.

The tax bill that Carter signed yesterday means that some 46 million tax-payers, 90 per cent of them with incomes under $20,000 a year, will pay an average of $111 less in taxes annually. This is because the standard deduction (for those not itemizing deductions on federal tax returns) will be moved to $2,200 for a single person and $3,200 for a couple filing jointly, beginning with taxes paid on this year's income.

The bill as a whole means individual and business tax savings of $2.6 billion in the fiscal year that ends Sept. 30, $17.75 billion in fiscal 1978 and $13.8 billion in fiscal 1979.

As initially proposed by the President, the bill contained a provision for a $50 rebate to individual taxpayers that would have been paid out shortly after its passage as a means to stimulate the economy. But when that proposal ran into serious opposition in Congress and the economy appeared to be improving, Carter withdrew it.

He also asked for the deletion of $3.1 billion in business tax cuts - another part of his economic stimulus package - but Congress refused to go along and voted those reductions.

In other developments, the White House announced that a formal administration economic forecasting group has been formed and will make its first forecast on economic trends in mid-June.

The White House also announced that Carter will hold a press conference at 10:30 a.m. Thursday before leaving that day for a six-day Memorial Day weekend vacation on St. Simons Island, Ga.

Last night, the President addressed a White House conference on the handicapped at the Sheraton Park Hotel. Reviewing administration efforts to aid the handicapped, he said, "The time for discrimination against the handicapped is over."