JERUSALEM (Jul. 7)
Demand has risen in the Israel economy this year, pushing up interest rates by one or two percent, according to a report released by the Bank of Israel today. Wages went up 10 percent in 1970, and wage costs per hour rose 14 percent, the report says. Visible imports–excluding direct arms imports–rose by 10 percent in the first quarter, compared with October-December, 1970. The Bank believes dollar expenditures would have been greater but for the taxes of last August, which made imports more expensive. Exports rose rapidly in the second and third quarters of last year, but since November have settled at around $67 million monthly. There was an improvement in the first quarter of this year compared to the corresponding period last year; but this improvement derives from increased orders in late 1970, the report stressed. Industrial exports continued to increase, but there was a flagging in the agricultural category. “Invisible trade” showed an increase last year in the form of arms purchases and higher outgoing payments because of the swelling foreign debt. The most striking improvement this year has been in tourism, according to the report. Foreign exchange reserves have been kept stable, rising from $341.8 million at the end of March, 1970, to $388.5 million at the end of May, 1971.