Strikes, Upheaval Blunt East Bloc Economic Gains, U.N. Reports

Shortages, strikes and political upheaval have cut sharply into East Bloc economic growth, and the outlook is grim for the winter, the U.N. Economic Commission for Europe reported Thursday.

The commission spoke of “general and significant” slowing--particularly in light of some national plans for 5.5% growth in 1989.

East European gross industrial output rose just 2% in the first nine months of this year despite plans to beat the 1988 increase of 4%, the commission said. Soviet growth slowed from 4.5% last year to below 2.5% in the first nine months of the year.

The U.N. office pointed to “a variety of supply constraints and transport bottlenecks” in the East Bloc deceleration.

“In the Soviet Union, strikes have led to raw material and energy shortages which, exacerbated by problems in the Soviet transport system, appear to be spilling over into neighboring economies via reduced export deliveries,” the report said.

“This situation of supply bottlenecks and shortages is likely to worsen with the approach of winter,” it warned.

The report hailed “the rapid pace of political change” in the East as well as accelerating economic reforms. But it added that “problems of adjustment--or in the case of Hungary and Poland, of transition from a centrally planned to a market economy--are considerable, and rapid improvements in economic performance are not to be expected.”

The commission was uncustomarily outspoken in the latest report on its regions of responsibility--Eastern and Western Europe plus the United States and Canada. Previously, it stuck to figures with little comment.

“For one thing, we have for the first time suddenly been getting up-to-date statistics and reports and explanations from the Soviets and East Europeans,” one commission official said privately.

Along with supply and transport squeezes, the report warned, “labor shortages as a result of large-scale emigration may arise in Bulgaria and the German Democratic Republic”--a reference to the exodus of ethnic Turks from Bulgaria to Turkey and East German movement to West Germany.

The commission said Soviet, Polish and Hungarian authorities are expected to try to curb inflation with a range of austerity measures, which will probably further slow economic output over the short term.

With little improvement likely this year, the East Bloc outlook for 1990 also “remains uncertain,” with growth possibly in the 2.5% to 3% range, according to the U.N. economists.

As for trade, the expansion of East European exports to the West slowed to 4% in the first half of this year from a 6% surge in the same period of 1988. But imports from the West leaped by 13% in the first six months of this year.