Gloomy Economic Picture Painted for Europe : Commerce: The United Nations also predicts more unemployment in the West and continued troubles in former communist countries.

United Nations economists Sunday issued a gloomy economic outlook for Europe in 1993, predicting a new surge of unemployment in the West and continued economic decline among the former communist countries.

In its biannual East-West report, the world body’s Economic Commission for Europe urged tighter cooperation among leading economies and better aid to help the old Soviet bloc set up real market systems.

“The outlook for the western economies in 1993 has declined sharply since the summer,” the report said.

“The forces of recession appear to have increased in the second half of 1992 . . . the outlook remains somber.”

Official growth forecasts for 1993 in western Europe slipped from the 2.7% rate predicted a year ago to only 1.5%.

The report was completed before figures were issued last week suggesting a third-quarter upswing in the United States.

But economic commission analysts said it is still too early to assess the real strength of the U.S. recovery.

The report said over-confident forecasts of an upturn that had not arrived acted as a depressing factor in the West. In the East, excessive optimism on the speed of transition to market economics also proved damaging.

“The frustration of rising expectations is widespread and provides fertile ground for the revival of ancient hatreds. In many parts of the region, aggressive nationalism and ethnic conflicts are increasing,” the report said.

Advances in three of 26 ex-communist “transition economies”--Poland, Hungary and Czechoslovakia--have established the structure for a functioning market economy.

But in overall terms, the 1992 slump in output has deepened across the region for the third year running. The new states of the former Soviet Union, including the three Baltic republics of Latvia, Lithuania and Estonia, have been especially hard hit.

For Russia, the ECE said, output is likely to fall in 1992 by at least 25%, taking the total drop since 1989 to around 36%. In Latvia, industrial production was down 31% over the first six months and in Lithuania 40%.

Unemployment is also rising sharply throughout the old communist bloc, climbing in 1992 to 14% in Poland in September and showing a “very rapid increase” in the former Soviet Union.

“The prospect of mass unemployment in countries where the social safety net is often rudimentary must inevitably increase the danger that social and political support for economic reform will quickly evaporate,” the report said.

The report said that while west European countries are not likely to increase trade among themselves significantly, there seemed little prospect of stimulus from Japan or the United States.

“Thus, the three principal poles of the developed industrial world are now entering a period of weakening growth simultaneously, a situation which a year ago most forecasters thought would be avoided,” the report said.

Low business confidence and political doubts about the future of the European Community could lead to the risk of a serious recession, the report warned.