SOVIETS OUTLINE 1988 ECONOMIC TARGETS The Soviet Union outlined its economic targets for 1988 on Monday, stressing the need to improve standards in the country's sluggish engineering industry. Planning chief Nikolai Talyzin told the Supreme Soviet industrial output should rise by 4.5 pct in 1988, up from a planned 4.4 pct in 1987. It rose 3.6 pct in Jan-Sept 1987. Talyzin said national income, the nearest Soviet equivalent to gross national product, should rise by 4.3 pct against a planned 4.1 pct this year. Gross national product measures the output of a country's goods and services. He said the Kremlin planned to produce 235 mln tonnes of grain in 1988 versus a planned 232 mln this year. Moscow produced 210 mln tonnes in 1986. Kremlin leader Mikhail Gorbachev has described machine-builing as a sector whose rapid modernization is essential if the Soviet Union is to compete effectively on world markets. "Certain difficulties have arisen this year in the machine-building industry. The economy is not receiving a considerable amount of the equipment that it requires," said Talyzin, who heads the state planning committee GOSPLAN. Soviet data show the machine-building industry, which makes machine tools, instruments and other engineering goods, increased output by 3.3 pct in the first nine months of 1987 compared with the same period last year. However, this was far below the 7.3 pct increase planned for the industry for the whole of 1988. Talyzin said the ruling Politburo had concluded at a recent meeting that an improvement in economic performance depended to a large extent on conserving resources better. "Large-scale measures are planned to save resources," he said. Finance Minister Boris Gostev told the Supreme Soviet that defense spending in 1988 would total 32 billion dlrs, the same figure as was announced last year. Western governments view official Soviet estimates for defense spending as highly understated, but say the real figure is hard to calculate because Soviet military industries are intertwined with the civilian economy. Talyzin said the Kremlin also decided to increase spending next year on medical services, education, pensions and social insurance schemes.