Israel’s inflation topped the 100 percent mark in 1979, it was announced today. The Central Bureau of Statistics reported that the cost-of-living index rose by another 8.1 percent last month bringing the total inflationary increase for the last calendar year to III.4 percent, the longest in Israel’s history for any year.
The Treasury promptly issued a statement expressing satisfaction that the December rise was some two percent less than expected and claimed that this was the first sign that the government’s fiscal policies were heading the economy in the right direction. Finance Minister Yigal Hurwitz said he was “happy” and credited the apparent slowdown to public restraint. “I believe the public is well aware of the efforts made to rehabilitate the economy,” he said. “It is difficult and painful, but the public understands and I am happy. These results prove that the public understands.”
But the Central Bureau was more cautious. David Neumann, a spokesman for the statistics-gathering unit, said it was too early to tell whether the December figures were indeed a sign that galloping inflation has slowed down.
The impact of the Bureau’s report was cushioned, somewhat by the announcement today that Histadrut and the Treasury have agreed to a 26 percent increase in the cost-of-living allowance, payable with this month’s salaries. It will apply up to incomes of IL 13,500 which means that no one will receive an increment of over IL 3500.
EXCEEDED MOST PESSIMISTIC ESTIMATES
Nevertheless, last year’s triple-digit inflation exceeded even the most pessimistic estimates. At the beginning of 1979, a 60 percent annual rate was predicted. Later, then Finance Minister Sincha Ehrlich said inflation would rise by no more than 40 percent for the year. Both prognostications proved for off the mark.
The price of housing rose last year by 159 percent. An official of Shikun Ovdim, one of the largest construction companies, said the price of apartments increased by 360 percent since August, 1977. A flat that cost IL 280,000 at that time now sells for over IL 1 million, he said.
The Treasury hopes that inflation will not exceed 70 percent in 1980. But this will depend on whether the government stays within the limits of the proposed IL 405 billion budget. The budget is the subject of a bitter controversy between Hurwitz and three other ministers–Deputy Premier Yigael Yadin, Housing and Construction Minister David Levy and Social Settlement Minister Yisrael Katz. They are opposed to budget cuts for social welfare purposes.
JTA has documented Jewish history in real-time for over a century. Keep our journalism strong by joining us in supporting independent, award-winning reporting.
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.
