WASHINGTON — The National Retail Federation is forecasting a 4.5 percent growth in total sales for general merchandise, apparel, home furnishings, electronics, appliance, sporting goods, hobby, book and music stores, collectively known as GAFS, in the second half of 2003, up from 2.2 percent growth in the first half.

GAFS sales are expected to increase 3.5 percent for the year.

“Now that the Iraq conflict has ended, we are all waiting for the economy to show increased vigor,” NRF chief economist Rosalind Wells said in a statement Thursday. “Though there will be lingering economic problems, retailers can expect solid, steady growth in the second half of the year,” when the economy and retail sales will be helped by lower energy prices, a rebound in the equity markets and the lowest interest rates since the Fifties.

Mortgage refinancing will provide consumers with additional disposable income, which is likely to be plowed back into spending on the home. Also, the recent passage of the $350 billion tax cut package will almost certainly lift economic growth, adding almost 1 percentage point to real disposable income for the year.

Several retail sectors, including home goods, appear to be poised for solid growth in the second half, Wells said. “Also, pent-up demand for apparel, provided weather and styles cooperate, should increase sales of clothing and accessories,” she said.

First-quarter GAFS sales rose a modest 1.4 percent. Second-quarter sales are estimated to have increased 3 percent, third-quarter sales are projected at a 4.3 percent increase and fourth-quarter sales are estimated to increase 4.7 percent.

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