Herald and Review from Decatur, Illinois • Page 37

FOCUS Decatur, Illinois Wednesday, March 8, 1989 PamidlovDDDo slowdown for sftarto oonomy What's ahead for Illinois Illinois budget planners used a combination of figures from the two big national economic forecasting firms, Wharton Econometric Forecasting Associates and Data Resources Inc. These are the predicted levels and increases for the year beginning July 1: Inflation 4.9 percent. Real Gross National Prod uct up 2.1 percent. Corporate Profits up 1.1 percent. Personal income U.S.

up 7.1 percent; Illinois up 0.5 percent. Employment U.S. up 1.2 percent; Illinois up 1.0 percent. Unemployment U.S. 5.7 percent; Illinois 6.5 percent.

By ANTHONY MAN Springfield Bureau Chief SPRINGFIELD State budget tanners expect a slowdown in the Uinois economy during the next IS months, but no recession. Robert Mandeville, director of Gov. James R. Thompson's budget bureau, said the fiscal 1990 state budget is based on assumptions of continued increases in almost all economic measures: growth, income, jobs and inflation. But, he said, increases in all the good things are likely to slow during the next fiscal year, which begins July 1.

A lower growth rate and higher inflation are both likely, Mandeville said. Moreover, budget drafters expect that Illinois will continue to lag behind the nation on key indicators such as personal income and the percentage of people with jobs. Illinois unemployment is again expected to top the national average. "ALL OF THESE are positive figures, they're all growth, but they are as indicative of growth that will grow more slowly than it has in the last five years," Mandeville said. "I think I could use the word 'sluggish' growth.

Some call it a 'managed economy' in the sense that they're trying to slow rates is intended to moderate the continued strong demand, thus capping future inflationary pressure," the document states. The budget director said there is no need to change any assumptions even though the Federal Reserve has been increasing the interest-rate pressure. "Most of that has already been discounted by the economic forecasts," Mandeville said. BUDGET DRAFTERS were concerned with the economic outlook for fiscal 1990 because the national and state economies can affect spending and tax receipts. Mandeville said a recession during the 1990 fiscal year is unlikely.

"A recession will come sometime later, but not in (fiscal year) 1990." Yet there is some disagreement over the implications of the economic picture. "The long term prospects for the Illinois economy remain strong," Comptroller Roland Burris said in his annual report, released earlier. "However, continued short-term growth may depend on the success of the Federal Reserve's attempts to keep inflation at moderate levels without threatening the continuation of the economic recovery," the Burris report said. dicts continued moves to increase interest rates by the Federal Reserve. "The increase in interest down the economy.

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