A FOOTNOTE TO SOVIET GROWTH

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01003A001900080001-2
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 12
• Document Creation Date: November 16, 2016
• Document Release Date: November 30, 1999
• Sequence Number: 1
• Publication Date: February 1, 1964
• Content Type: BRIEF

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FOR OFFICIAL USE ONLY
Current Support Brief
A FOOTNOTE TO SOVIET GROWTH
CIA/RR CB 64-13
February 1964
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
FOR OFFICIAL USE ONLY
GROUP 1
Excluded from automatic
downgrading and
declassification
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 F
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The purpose of this publication is to project the discussion of recent
estimates of rates of Soviet economic growth a step forward by consider-
ing some possible patterns for the near future, particularly 1964. It is
not intended to be a forecast of the growth likely to be achieved in the
next year or two.
To set the stage, it is instructive to review the performance of the
Soviet economy in 1962 and 1963, using the preliminary estimates for the
latter year. A simplified model of gross national product (GNP) by sector
of origin consists of agriculture, industry, and "all other. " "All other"
includes such categories as construction, transportation, communications,
services (as for education and health), and domestic trade. To each of
these three sectors can be assigned an equal one-third weight, which is
not too far from the actual weights used in the more detailed calculations
of this Office -- 36.2 percent for agriculture, 30.3 percent for industry,
and 33. 5 percent for "all other. " By using the simplified model, the
following percentage changes are determined for 1962 and 1963 (com-
pared with the previous year in each case):
1962 and 1963
(Percent of Change)
Agriculture -
Industry 7
"All other" 4
GNP increase 2.3
Clearly it was the negative agricultural weight that acted as the
primary depressant to growth in the Soviet economy in 1962 and 1963.
In projecting possible patterns of growth in 1964, the rates of growth
for industry and for the "all other" category at a constant 7 percent
and 4 percent, respectively, are reasonable first approximations of
likely achievement. By varying agricultural performance, the follow-
ing alternative models* can be constructed.
* These models are not intended to be comprehensive but only as first
approximations that reflect possible trends within the economy. As
such, no attempt has been made to [footnote continued on p. 21
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 Approved For Release 2P 04fTF 9aQ O3A001900080001-2
Possible Percent of Change
in 1964 Compared with 1963
Model (1)
Model (2)
Model
3)
Agriculture
0
4
8
Industry
7
7
7
"All other"
4
4
4
GNP increase
3.7
5.0
6.3
Under Model (1), agricultural output would be the same as in 1963,
but over-all growth of GNP would increase from 2. 3 percent in 1963 to
3. 7 percent in 1964. Thus if 1964 were to be a year of stagnation in
agriculture -- that is, zero growth -- the USSR again could be in the
market for substantial quantities of wheat or feed grains from the West.
Such circumstances would be a disaster, or near disaster, to the USSR.
However, severe shortages of grain would not inevitably accompany an
absence of growth in agriculture: production of wheat in the USSR could
recover while output of other agricultural products that carry large
weights in the index of over-all output, such as livestock, declined
sufficiently to neutralize the improvement in output of grain.
Under Model (2), agriculture would recover by a modest 4 percent,
to about the level of 1962 - - a level unsatisfactory to the Soviet leader-
ship. However, over-all growth of GNP would be 5 percent, which
statistically would look ?i4ce a respectable upturn. The point is that
unless the USSR is able to register an increase of 5 percent in GNP
for 1964, it could well be in serious economic difficulties again; an
increase of 5 percent in GNP is the minimum performance that could
likely be classified as a "get-by" level.
Model (3) shows an increase of 8 percent in agricultural output,
which is approximately the increase needed to restore agriculture to
the level of 1961, thus providing a modest surplus beyond domestic
needs and the need for agricultural exports to the European Satellites
if the major recovery were to be in grain crops. Such a level of
analyze the interrelated effects of the growth of one sector on the others.
For example, within the industrial sector the food-processing and textile
industries would be related to the growth of the agricultural sector. A
weighted arithmetic average has been used to compute the growth of
GNP.
Approved For Release 20buO/$4R~E iRl'bf66A001900080001-2
 Approved Fob ted ?-AR0/~ 170 l~-RDP79T01003AO01900080001-2
production in agriculture would be consistent with an increase of 6. 3 per-
cent in GNP for 1964. However, if agriculture in 1965 were to do no more
than hold this level while the other economic sectors advanced as they
have in recent years, over-all growth of GNP again would fall to 3. 7 per-
cent [Model (1)].
Recovery in the rate of growth of GNP in 1964 would not necessarily
mean that the USSR was on the road to recovery in agriculture -- indeed,
a rate of growth of 4 percent could find domestic wheat supplies again
far short of needs. Moreover, unless there is a significant acceleration
in the rate of growth in industry or other nonagricultural activity --
which is not foreseen at the moment -- continued substantial increases
in agricultural output beyond 1964 would be required to return economic
growth to a sustained high level comparable to the 1950's.
STATINTL
Analyst:
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 Analyst: WE SSTT01INTL
Approved F a gag. 00__ I,p~1~O69A00080D
" lf. Et ..-r~s K 1 l~l~a ;r E It I' E
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33
35
163-200
163
164- 166
167...
168
169 ...
170,
171
172
173 ----17.5-
176
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186 OB/HRG/CGS, 3F30 H
FOR OFFICIAL USE ONLY
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11 Feb 64
12 Feb 64
13 _Feb 64
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187 200 Filed in St/P/C _
201 - 210 DDI 11 Feb 64.
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SUBJECT; Distribution of Current Support Brief No. 64-13, A Footnote to
goyigl w h --- February 1964 (FOR OFFICIAL USE ONLY)
Copy No.
Recipient
1 O/DDI, Room 7E32, Hdgtre.
2-3 NIC
4 - 12 OCI Internal
13- 15 ONE
16 - 21 St/CS/RR
22 O/DDI - Chester Cooper
23 31 NSA C312
32 . NSAL
33 - 230 ORR Distribution, St/A/Document Support Section, Room GH0915,
Hdqtrs, (Sent direct to St/A/DSS, 11 Feb 64).
(Distributed by OCI
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rl'R 0-1F L' L USE LY
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Soviet X Growth --- February 1964 (FOR OFFICIAL USE ONLY` -
C2y No,
1 34
36 - 40
41 -46
47 - 52
53 - 60
61 - 69
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15-80
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162
Recipient
Zdmi*ft
ARKS&
St/PR
D/A (I each branch)
D/MS (1 each branch)
D/R (1 each branch)
D/M (1 each branch)
1)/I (1 each branch)
D/GG
D/GC
D/GC/X
RID/AN,
St/FM
Unit 4. Ro
o N f 4004, Hqo
STA
Analyst /Branch
GR/ CR
BR/CR
FIB /SR/ CR,
Library / CR
IPI/CR
VMR, A-18
AD/OO
Chief, FDD
CD/OO
Ch/E)
1G27, Hq?
OCI/RP/PS, Room 7G15, Hqo
DDI/CGS, Room 7F35, Hq.
DDI/CGS/HR, Room 3F30, Hqo
OSI
OBI
OTR/IS/IP, Room 532, Broyhill Bldg, 0 - OTR/SIC)
NPIC/CSD/REF, Room 1S518, Bldg. 213
Commandant Nat'l. War College, Ft, Leslie McNair, Attn: Classified
Records Section, Rrn, 26, Nat'l. War Colle
e Bld
W
h
g
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as
., , 25, D, C,
ACSI/Army, Room IC460, Pentagon
Navy, Director, ONI, Room 5B659, Pentagon
HQ0 USAF, Attn: AFNIN- 3D 1, Room 4B137, Pentagon
Asst, Secretary of Defense, ISA, Room 4D825, Pentagon
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1734 New York Avenue, N. WD
State, INR Communications Center, Room 7818, State Dept. Bldg,
DIA, DIASA-2C, Room 2D233, Pentagon
Dr. Neilson Debevoise, NSC, Room 365, Executive Office Building
Frank M., C.harrette, Agency for International Develo
pment, Chief,
Statistics and Reports Division, Room 302, State Annex No. 1
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18 Febr,
M 4 RANIRt4 FC is t ef, Dissemination Control Branch, DD/CR
n am Chief, Publications Staffs ORE
SUBJECT : Transmittal of Material
it is re4uested that the attached copies of CIA/RR CB 64-13s
A Footnote to Soviet C3rowth February 196 s For official use th1ys
be forwarded as t owe:
States TNR Counicati.one Center,
Room 7818, State Dept. Bldg.
For babassies in Berlin, Moscow,
Bonn, Yrankfurt, London,, and
New I*1hi
STATINTL
Attachments:
Copiee . 89 - 194 of CB 64-13
cc: CGR/RB
7- f
TED
Tha c.nscvr, L?nn rF?~:: es'-d by
!us mo+norandurn has been completed;
6Y.
Date:
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'. !eject. No O. 5098 Report Series CIA./RR CB 64-13
le -AFootnote to Soviet Growth (For Official Use Only)
-tesponsible Analyst and Branch __ Ch/E
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