JERUSALEM (May. 16)
Israelis, increasingly disturbed by the deteriorating economic situation, were shocked yesterday when the Central Bureau of Statistics released its report for April showing that the cost-of-living index rose by 13.3 percent, the highest monthly increase since the State was founded 35 years ago.
This exceeded the most gloomy predictions and triggered a wave of angry reactions from the Labor opposition, Histadrut, various economic experts and industrialists who oppose the Likud government’s economic policies. Equally tough was the government’s reaction. The Treasury declared it was “more strengthened than ever” in its determination to “stand firm” against pressures on the wage front. Finance Minister Yoram Aridor claimed last week that his policies had the full support of Premier Menachem Begin and the Cabinet.
RATE OF INFLATION IS AT 160 PERCENT
David Neuman, a spokesman for the Central Bureau of Statistics, said the rate of inflation for the first four months of the year was running at an annual rate of 160 percent. The rate over the 12 months from May, 1982 to the end of April, 1983 was 140 percent, Neuman said.
He blamed the soaring prices of housing, food and clothing for the record inflation in April. The c.o.l. index usually rises in April because national and municipal tax collections start on the first of that month. But these were not the chief causes of the run away inflation registered last month.
Neuman pointed out that the price of apartments rose 22 percent in April; clothing and footwear were up 25 percent; and fruit and vegetables 18 percent. The Treasury challenged the Central Bureau’s method of calculating the inflation rate, contending that it should not have included the 600 Shekels being charged by striking doctors who normally treat patients free at government hospitals and Histadrut clinics. But Neuman said that even if that had been eliminated, the April rise would have been 12 percent-plus.
A Treasury spokesman predicted a turn for the better this month. He said the April figures for wholesale prices indicated that retail prices, the basis on which the cost of living is calculated, will come down in the near future. The Labor Party, however, called on Begin and his government to resign for mismanaging the economy. Yeruham Meshel, Secretary General of Histadrut, said there was “real fear” in the country because of declining exports, both industrial and agricultural, and looming unemployment. He said that in some northern development towns the unemployment rate was 10 percent.