Projections for the federal budget keep getting rosier, with the Congressional Budget Office now predicting a deficit for fiscal year 1998 of only $5 billion -- characterized as little more than a rounding error in an annual budget of $1.7 trillion.

Moreover, in revised projections issued yesterday, the CBO anticipates mounting surpluses in the coming decade.

• The CBO predicts a surging economy will wipe out any remaining vestiges of the deficit by 2001 and generate surpluses of as much as $138 billion by 2008.

• The CBO's forecast is even more extraordinary, analysts say, because the congressional agency has traditionally been more conservative than the president's Office of Management and Budget.

• Only a few days ago, President Clinton was predicting a deficit this year somewhere below $22 billion.

• CBO director June E. O'Neill said the deficits anticipated for the next three years are "so small that a puff of wind can blow them to the positive side of the ledger."

The federal government hasn't achieved a balance budget in 30 years and Herbert Stein -- who was chairman of the Council of Economic Advisers then -- now calls release of the new CBO numbers "a happy moment."

But experts caution that economic forecasting is still an inexact science. "Any projections," O'Neill said, "should be taken with a grain of salt."