Slight Rise in Consumer Price Index

The consumer price index rose by only 1.6 percent in May, the smallest rise for that month in 10 years. But some Israelis are complaining.

The Finance Ministry has refused to adjust tax brackets. The 5.8 percent cost-of-living increase to be added to salaries payable July I will therefore be the gross rise, but less in net terms. The Manufacturers Association expressed regret that employers will be forced to pay the increase without being allowed to raise their prices.

Government spokesmen hailed the small cost of living increase as evidence that the war against inflation is being won. They noted that less than a year ago, Israel had an annual inflation rate of 300 percent, one of the highest in the world. Now it has been reduced to what they called “European proportions.”

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