World Economy Shrinks for 1st Time Since ’45 : Global: A U.N. report blames widespread recession, the collapse of communism and pockets of violence for the 0.5% decline in the world’s gross domestic product.

The world economy is in worse shape than at any time since the end of World War II, brought down by widespread recession, communism’s collapse and a flurry of violence, the United Nations reported Tuesday.

In a report to the General Assembly, Under Secretary-General Rafeeuddin Ahmed said this year will mark the first time since 1945 that the total production and income of all the countries in the world will actually decline.

The world’s gross domestic product--the statistic that measures what everyone produces--will drop by 0.5%.

In every other year since the end of World War II, he said, declines in some countries were always offset by growth in others.

“This year, economic decline is so widespread--and so deep in Eastern Europe and the Soviet Union--that it fully negates the positive impact of the more dynamic economies, principally those of China, Japan, several other Asian nations and certain Latin American countries that are emerging from long stabilization and adjustment efforts,” Ahmed said.

Ahmed attributed the unprecedented decline to three difficulties: recession in some of the most important industrialized countries that account for a third of the world’s economic activity; war and civil strife in the Persian Gulf, Yugoslavia and some African countries, and economic dislocations in countries shifting from communism to free-market economies.

Ahmed, the under secretary-general in charge of international economic and social affairs, said the situation was a dangerous one. “Freedom must be complemented by development and social justice if it is to be sustained and secured over the long term,” he said.

He said stimulation of growth should be the first priority of government--not the attempt to hold down inflation that obsessed industrialized governments in the 1980s.

If growth is not encouraged and the world economy remains as anemic in 1992 as most forecasters predict, Ahmed said, “the stagnation in large parts of Africa and Latin America and the steep recession in the Soviet Union and Eastern Europe will not be overcome easily.”