In view of the continued freeze on American economic aid to Israel an of an anticipated loan from the Export-Import Bank, the Israel budget is likely to be cut by 100, 000, 000 pounds. The budget for 1956-57 was originally estimated at 850, 000, 000 pounds.
The anticipated American assistance, computed at about $70, 000, 000 of a foreign currency budget of $408, 000, 000, had been assigned to development projects whose tentative budget was set at 235, 000, 000 pounds. Since the government does not want to cut the development budget by the full 100, 000, 000 pounds, it is likely to curtail regular services as well as development plans.
Key government officials from various ministries have begun planning for a national program of belt tightening in Israel to offset possible drops in foreign currency receipts Economic experts here believe that Israel can afford to cut its imports by about 20 percent without seriously dislocating the economy. Imports will be slashed to defense needs and absolute essentials, under the proposed austerity program.
The emergency plan is based on the principle of avoiding an inflationary spiral, at all costs. Reportedly, the planners are thinking in terms of wage reductions and a loosing of ties between wages and the cost of living index. Meanwhile, the first consignment of goods for transshipment across Israel to East African parts arrived at Haifa today. The cargo of machinery and dried fruit came from Cyprus, France and Italy for shipment across Israel by train and truck to the Gulf of Akaba port of Elath. There the cargo will be loaded aboard the vessel Catherina Madeira for the voyage to Massawa, Eritrea.
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The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
