Israel’s trade deficit decreased by $11, 000, 000 to $124, 000, 000 during the first five months of this year, according to figures released here today by the Bank of Israel.
The major reason for the lack of more substantial improvement in the trade gap, according to the bank, was the stagnation of exports which rose by only 13.8 percent in the first half of the year. Most of the export increase was due to the sale of used ships and aircraft. The sale abroad of industrial diamonds, one of Israel’s main export items, increased by only 5.2 percent compared with a 16.4 percent rise for the same period last year.
Officials of the Israel Government bank pointed out today that the lag in improvement in the trade deficit can no longer be attributed as in the past to either excess demands of the local market or a manpower shortage. The current reason seems to be, according to the officials, that Israel’s goods have ceased to be competitive owing to climbing production costs.
Finance Minister Pinhas Sapir, addressing a gathering of manufacturers, this week, urged them to reduce the manufacturing costs and made concrete proposals how this can be done. This, he explained, could result in bringing up Israel’s export this year to $830, 000, 000, which would be $80, 000, 000 more than last year.
The Finance Minister said that the current economic recession in Israel was “only the beginning of a long uphill struggle against easy living, deficit spending by municipalities, public bodies and private firms, and excessive consumption in general, which could have had disastrous results if not checked.”
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