TEL AVIV (May. 15)
The cost-of-living index in April soared by 20.6 percent, the highest increase ever for that month and the second highest monthly increase in Israel’s history, according to figures released today by the Central Bureau of Statistics. Economists warned that if the present trend continues, the inflation rate for 1984 will reach an unprecedented 406 percent.
The cost-of-living index rose by 263 percent during the past 12 months. In April, 1983, it was 13.3 percent. The all-time record increase was registered last October when the cost-of-living rose by 21.1 percent, triggering a sharp reversal of the Likud government’s economic policies, including a 23 percent devaluation of the Shekel and drastic reductions in subsidies for food, fuel and other basic commodities.
With elections less than two months away, the government and opposition each blamed the other for the alarming rise last month which was much higher than Treasury and bank officials had forecast. Finance Minister Yigal Cohen-Orgad said the increase was largely due to the failure of Histadrut to agree to an economic package deal.
Histadrut and Labor Party spokesmen charged that failure of the government’s economic policy was responsible for the runaway inflation. Finance Ministry sources said the increase was also due in part to the government’s efforts to balance Israel’s foreign trade deficit and foreign currency short-fall, efforts which they claim are showing success.
The record inflation rate for April apparently forced the government to reverse its earlier rejection of Histadrut demands for payment of a special cost-of-living allowance with May salaries, due on June 1. Deputy Premier David Levy said tonight that Cohen-Orgad has agreed, at his urging, to an advance payment. But by the time the workers receive the payment, their salaries will have lost one-fifth of the original value.