‘severe Restrictions’ Indicated for Israelis; Cost of Living Rises

Israel’s new economic policy, which went into effect last February with the devaluation of the pound, must also embrace “a rigid economic policy, entailing severe restrictions,” Y. Foerder, chairman of the Bank Leumi board of directors, warned here today. He made his statement at the opening of the bank’s shareholders’ 60th annual meeting here.

The new economic policy, said the head of Israel’s largest bank, must be given priority, “lest the economy remain in an unclear and actually adverse position. He told the stockholders that he did not think the timing of the devaluation, on February 9, had been “appropriate,” and that the pegging of the Israeli pound at three for a dollar “was not enough.” He said a higher rate should have been fixed.

The bank head also said the Government should abstain from adding new governmental companies, should increase credits and should, “above all,” prevent wage increases.

It was learned here today that the March cost-of-living index rose by 2.5 points and it was estimated that, by July, the cost-of-living allowances for Israeli wage earners will be increased by about 50 Israeli pounds. The steepest rise was recorded in the prices of foods. Compared with March 1961, the cost of living rose by II percent.

Meanwhile, it was indicated here today that Israel expects its income from tourism to exceed 100,000,000 pounds (over $33,000,000) this year. Theodor Kollek, chairman of the Government Tourist Corporation, and Meir Deshalit, the company’s director-general, told a news conference that more than 160,000 tourists have entered Israel thus far this year.

According to the officials, the recent devaluation of the Israeli pound has resulted in the lowering of the cost of hotel rooms by about 15 percent. The decreases in the cost of meals for tourists were even larger, they said.