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Netanyahu rejects projections concerning next year’s budget

JERUSALEM, July 29 (JTA) — Prime Minister Benjamin Netanyahu has rejected the Finance Ministry’s economic projections for 1998, finding them too downbeat. In light of the initial figures, Netanyahu this week put off a scheduled Cabinet discussion of the 1998 budget, rescheduling it for mid-August. By that time, according to instructions Netanyahu issued this week, the Finance Ministry was to come up with a new forecast that would include concrete proposals for growth in 1998. The ministry said last week that it expected growth of only 3 to 3.5 percent in 1998, following a rise in gross domestic product of only 2.5 percent in 1997. For most of the past decade, annual economic growth has hovered around 6 percent. The ministry also forecast that unemployment would reach 7.7 percent this year, and increase by 0.2 percent next year. Treasury officials viewed 1998 as a transitional year for economic growth, which they said would be achieved if the government stuck to its budget deficit target of 2.4 percent of the 1998 gross domestic product, widened the tax base, reduced its involvement in the public sector and implemented previous decisions regarding foreign currency regulations. In a meeting last Friday with Finance Minister Ya’acov Ne’eman and other senior ministry officials, Netanyahu asked to see the new economic forecast by Aug. 10. He directed the Finance Ministry economists to come up with wide- ranging proposals to restore economic growth by next year.