Finance Minister Pinhas Sapir warned today that painful measures would be necessary to stem Inflation and avert a serious recession in Israel’s economy. It was the Finance Minister’s second warning on the subject during the past 48 hours.
Sapir was addressing the Labor Alignment’s economic committee. He said he could already discern disturbing signs of an economic slow-down in the fact that the Investment Center has approved only $66.6 million in investments during the first five months of this year compared to $88 million in the same period last year,
Sapir said that while the defense budget was a heavy burden, It could not be blamed for the inflationary spiral. Living standards have risen by 25 percent since the Six-Day War he said and currency In circulation was up nine percent between Feb. and May of this year. Another source of inflation is building prices and exports premiums, Sapir said. The economic committee appointed a sub-committee to discuss anti-inflation measures next week.
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