The vice-president of the Federal Reserve Bank of San Francisco, David Grove, has issued a stern warning that, unless the Israeli Government adopts and implements a much stricter anti-inflation policy, the national economy will deteriorate dangerously, it was disclosed here today.
The warning was contained in a report by Mr. Grove to David Horowitz, Governor of the Bank of Israel, made public here today. The question on whether to release the report in view of its outspoken opinions had been the subject of debate in the Government and among Bank of Israel officials.
While the report held that the 1962 devaluation of the pound and Bank of Israel anti-inflation policies were basically correct, it warned that developments of the recent past and those in the foreseeable future bode ill in view of continuing inflationary pressures.
Among the repot’s major recommendations were a tighter credit policy and reduction in borrowing abroad, and making such borrowing subject to greater coordination with the Bank of Israel’s domestic credit policy. The report found that “inflation is a manifestation of an understandable attempt to meet high priority goals of national policy without simultaneously curbing the expansion of non-essential consumption.”
The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
