Unexpected Hike in the C.o.lin Dex

Finance Minister Yoram Aridor is expected to renew his demands for sharp reductions in government spending in face of an unexpected upward surge of the cost-of-living index last month, following a downward trend last year.

The Central Bureau of Statistics reported yesterday that the c.o.I. for January rose by a record 8.3 percent, the highest increase for that month since the Bureau began recording statistics when Israel was founded in 1948.

The c.o.l. index rose by no more than 7.3 percent in January of 1980 and 1981. The Bureau said last month’s increase was caused largely by price hikes resulting from sharp cuts in government subsidies.

The January rise was alarming because it pushed the annual rate of inflation up to 127 percent compared to 101 percent last year. The big jump was registered despite declines of 2.2 percent in the prices of fruits and vegetables and a 3.1 percent decrease in the prices of clothing and footwear. But building costs went up by 13.3 percent last month. Builders announced that the price of housing would increase at a similar rate despite a slowdown in the sale of apartments.

ARIDOR INTENDS TO CURB INFLATION

Aridor has stated his intention to bring Israel’s inflation rate down from triple to double-digit proportions. His goal this year is a 90 percent rate. But he insists he cannot do this unless his fellow ministers agree to cut down government spending. He is embroiled in arguments with many of his colleagues on this issue, though so far he hat avoided a Cabinet debate. He faces strong opposition and does not have the support of Premier Menachem Begin.

According to the Central Bureau of Statistics, an average family in Israel needed a monthly income of 11,700 Shekels ($670) in January to sustain the same standard of living as last year. The Bureau also noted that the c.o.l. has increased some 500-fold since September, 1951.