'83 can be best year since '79

By Arnold A. Dill Senior Vice President Chief Economist The Citizens and Southern National Bank Atlanta, Ga.

IIY BASIC

IUI outlook for 1983 would be based on the following assumptions: that the Federal Reserve permits the basic money stock to rise about 6slo in 1983, similar to its increase in 1982; that Federal Government spending will increase about 990 in 1983 compared with 9.590 in 1982; and that the federal deficit will be around $155 billion in calendar 1983 versus $142 billion in t982.

These monetary and fiscal policy assumptions should be consistent with agrowth intotal spending (GNP in current $s) next year between 790 and 1090, up from about 4VzVo in 1982. Real output of goods and services should grow 2o/o to 390, compared with a l.5o/o decline in 1982. The overall inflation rate should be 5 to 6u/0. After trending downward sharply during 1982, interest rates will tend to level off or decline only gradually next year. However, since rates declined sharply during 1982 and are ending the year far below peak levels, interest rates will average between 2 and3Vz percentage points lower in 1983 than in 1982.

The above economic assumptions would also be consistent with a further recovery in the housing industry next year. Starts would increase from an estimated 1.03 million in 1982 to around 1.40 million in 1983, or an in(Please turn to page 2l )

Story at a Glance

lnterest rates between 2-31h"/o points lower housing starts up 35% . . wholesale lumber and wood prices will rase 6% to 9o/o . . . recovery beneficial for the South.