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Price Index Rose 5% in December

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The consumer price index rose by five percent in December, it was announced Thursday, a relatively small increase in line with the Treasury’s predictions. Economists forecast steeper rises in January, February and March however, reflecting new economic measures including the 10 percent devaluation of the Shekel.

Government sources expect the inflation rate to decline again by the second quarter of the year if wage and price restraints hold under the new economic policy.

Meanwhile, the dispute between the government and Histadrut over a proposed $30 million cut in subsidies for Kupat Holim (sick-fund) continued Thursday to delay the formal signing of the new economic program by the government, labor and management.

The labor federation has agreed to forego part of the cost-of-living allowances payable to wage-earners to offset inflation. But Histadrut Secretary General Yisrael Kessar vowed not to sign the economic package until funding for Kupat Holim is assured.

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