Measures Proposed to Stem Rapidly Rising Inflation Spiral

Moshe Zanbar, the Governor of the Bank of Israel, warned today of a rapidly rising spiral of inflation and proposed far-ranging measures to stem it. Zanbar presented his report at today’s Cabinet meeting. His recommendations have been referred to the Ministerial Committee on Economic Affairs.

Zanbar reported that money in circulation (means of payment) rose by more than 15 percent in less than a year. He said the inflationary pressures stemmed from the manpower shortage which has led to increased wage demands. There are about 30,000 jobs unfilled in the country. Zanbar said the present 12 percent ceiling on wage hikes must be maintained or higher tax rates would have to be introduced. Other causes of inflation were the large amounts of foreign currency being converted into Israeli pounds, mainly investments in building and in the stock exchange here and the proceeds from exports.

Zanbar called for an immediate cessation of all new public building and said mortgages should be made more expensive; proposed a six-month moratorium on all new development projects and suggested that the government sell some of its holdings in various companies as well as government-owned land and houses; proposed an increase in the cost of government credit for development projects; and called for higher interest on government bonds and savings plans to encourage saving and lower duties on foreign products to make Israeli made goods more competitive.

Sen. James L. Buckley (R.-Cons, N.Y.) has informed the Greater New York Conference on Soviet Jewry that he endorses the National Solidarity Day April 30. He reiterated his request to President Nixon to raise the issue of Soviet Jewry in his meetings next month in Moscow.