The broadest measure of the U.S. trade deficit widened dramatically in 1992, in large part because of the end of allied contributions to help pay for the Persian Gulf War, the government said Tuesday.
The Commerce Department said the current account trade gap totaled $62.45 billion, up $58.77 billion from $3.68 billion a year earlier when the allies sent more than $42 billion to the U.S. Treasury.
"Cash contributions from coalition partners in Operation Desert Storm held down the current-account deficit in 1991, but no sizable contributions were received in 1992," the report said.
Many analysts believe that the deficit will continue to grow this year because of weak overseas economies, which demand fewer exports of U.S. goods, while the American economy improves and stimulates appetites for imported goods.
"Our trade numbers should deteriorate somewhat further," said economist David Jones of Aubury G. Lanston & Co., a New York securities dealer. "Our imports are strengthening in line with the economy's expansion, while exports are faltering due to slumping economic conditions in Japan and Germany."
"The gap probably will be as large as this year," said Robert G. Dederick, an economist with the Northern Trust Co. in Chicago. "But it'll be considerably better than the bad old days" of the 1980s.
The deficit peaked at $160.20 billion in 1987 and then dropped below $100 billion for the first time in five years when it dipped to $92.12 billion in 1990.
Contributing to the 1992 deficit was a fourth-quarter imbalance of $22.02 billion, up from $15.77 billion during the July-September period and $18.28 billion in the October-December period.
The current account had opened the year with a $6.37-billion gap, the best showing since early 1991 when the allied contributions helped provide two rare surpluses. That helped to shrink the gap to $3.68 billion in 1991.
U.S. Current Account:
The broadest measure of U.S. foreign trade
Quarterly balance in billions of dollars
1st quarter 2nd quarter 3rd quarter 4th quarter 1991 -$7.2 1992 -$5.9 -$17.8 -$15.8 -$22.0
Source: Commerce Department