Finace Ministry Working on Post-freeze Plan to Prevent Resurgence of Inflation in 1985

A committee of senior Finance Ministry officials and academicians is working on plans to forestall a feared resu## gence of hyper-inflation when the present wage-price freeze package expires in January. Experts predicted today that February would be the critical month for the economy.

They say it will be known by then whether the freeze put a permanent brake on inflation or whether it will burst out anew once the wage price restraints are lifted. The team preparing for the post-freeze period consists of the Director General of the Finance Ministry, Emanuel Sharon; Deputy Finance Minister Adi Amorai; and two economists, Profs. Michael Bruno and Eitan Berglass.

Finance Minister Yitzhak Modai maintains that a new round of inflation after the freeze is not inevitable. He said yesterday that much depends on the behavior of the public and predicted a gradual but significant slowdown in the inflation rate between now and January.

According to Modai, the price index for October, before the freeze took effect, will be very high. It is due to be published tomorrow. The November index will show an 18-21 percent inflation rate, the December index between 10-12 percent and the January index between 7-9 percent, the first break in the double-digit phenomenon.

STRONG MEASURES URGED

Avraham Shapira of the Aguda Israel party, chairman of the Knesset Finance Committee, has called for draconion measures to restore economic health. He urged the government today to declare a two-year emergency during which all strikes would be banned in the vital services sectors and any minister who refuses to accept budget cuts would be replaced.

The freeze meanwhile is creating difficulties of enforcement. The press reported a multitude of cases where merchants are simply ignoring the government-established maximum prices. Several dozen merchants were hailed to court today for violations.

Police action against black market money changers has had little effect however despite the arrest of five dealers in Jerusalem. Illegal transactions in foreign currency simply moved to side streets and continued undisturbed.

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