JERUSALEM (Jul. 2)
The government’s income from various taxes declined by 16 percent in June, continuing a trend of several months, it was reported here today. The country’s foreign currency reserves also dropped by $49 million last month.
Economists hold the dwindling tax revenues responsible in part for the large scale printing of money by the Treasury and galloping inflation, currently running at an annual rate of 350-400 percent. The main decrease in tax revenue was from income taxes which were 26 percent lower last month than in June, 1983.
The foreign currency reserves stand at a dangerously low $2.9 billion. The decline was slowed down after the State transferred some $150 million from abroad. The diminution of reserves has been attributed to recent panic buying of foreign currency by the public who fear drastic economic austerity measure after the July 23 Knesset elections. Last month alone, individuals purchased about $250 million from the State which is 3-4 times the amount of such purchases in June, 1983.
The large scale printing of money is another symptom of the precarious state of the economy. The Bank of Israel printed about 61.6 billion new Shekels between April and June, more than half in the latter month.