The ballooning Soviet budget deficit could pass the U.S. deficit in 1990, according to figures published in a Soviet newspaper Saturday.
Driven by the cost of the Chernobyl cleanup, a crash program to solve shortages of housing and consumer goods, and reconstruction after the Armenian earthquake, Soviet red ink could nearly double next year to 100 billion rubles, or $162 billion.That figure, calculated by research economist O.T. Bogomolov and reported in the newspaper Arguments and Facts, is higher than estimates for the U.S. deficit for 1989, which range from $127 billion to $141 billion.
Worse, it looms as a far greater percentage of the Soviet economy - 11 percent of gross national product compared to 3 percent or 4 percent in the United States, Bogomolov said.
The economist blamed the deficit in part on the declining price of oil, the Soviet Union's primary export; and the anti-alcohol campaign, which cost $65 billion in lost tax revenue.
He also cited urgent social problems, apparently referring to the Soviet government's decision to boost spending on housing and consumer goods this year to appease an unhappy population.
In addition, the cost of reconstructing the area devastated by the Armenian earthquake is estimated at more than $13 billion during the next two years.
Soviet President Mikhail S. Gorbachev said last week that Soviet financial problems were so pressing that even the defense budget would have to be cut.
The Soviet Union first admitted to a budget deficit last autumn, saying it has been running in the red for years while telling Soviet citizens it was producing an annual surplus. Finance Minister Boris Gostev projected a deficit of $55 billion on a 1989 government budget of $795 billion.
However, some Western economists say the severity of a deficit is determined by its proportion to the entire economy, not just the government budget. They say that is a better indicator of how far a nation can afford to go into debt.
Until Saturday, the Soviet Union had not revealed the size of its economy.
But in reporting the 1988 economic statistics, Izvestia said Saturday that the Soviet gross national product grew 5 percent to $1.4 trillion dollars in 1988.
That would be a strong increase if it did not include inflation, but the newspaper did not say whether it did. The Soviet Union first acknowledged that it suffers from inflation last year, but officials said they had not yet calculated the rate.
Overall, Georgetown University Soviet expert Murray Feshbach evaluated the economic performance described in the Izvestia report as "not enough progress - but not failing badly either."
The Izvestia report said one out of 10 enterprises in the country was losing money, and only 12 percent of high schools have a single personal computer.
Although the economic news was mixed, Feshbach noted the Soviet Union had progressed substantially in reducing the extremely high infant mortality rate. The national figure dropped from 25.4 to 24 deaths per 1,000 births.