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Hurwitz Claims Success for His Economic Policies

July 10, 1980
See Original Daily Bulletin From This Date

Finance Minister Yigal Hurwitz presented data to the Knesset today purporting that his economic policies have achieved considerable success. He cited growing signs of on economic slowdown which cools inflation, a substantial decrease in imports for the first time in Israel’s history and a balance of payments deficit by the end of 1980 of some IL 2.6 billion which, he said was IL 600 million less than expected.

“If we persist with the economic policy which has been approved recently, we shall resist local demands, curb inflation and improve the balance of payments,” he said. He acknowledged that the slowdown would mean reduced investments but he predicted that investments in housing would grow.

Ezra Sodan, director of the Treasury’s Economic Planning Authority, reported at a press conference yesterday that the volume of exports in the first six months of this year reached $2.7 billion compared to $2.1 billion in the same period last year. Exports rose by 30 percent in the month of June alone, according to figures released by the Central Bureau of Statistics.

However, the Bank of Israel has proposed substantial cuts in government credit for exports as part of the battle against inflation. Until now, exporters received government assistance in foreign currency financing of up to 85 percent of the declared value of the goods. The Bank of Israel would reduce those credits by 17 percent on the grounds that even if exports are temporarily harmed, the deflationary effects would benefit the overall economy.

Minister of Commerce and Industry Gideon Patt disagreed. “There is no other way on other response to our economic problems but to increase our exports,” he said on a radio interview today.

Meanwhile, the National Manufacturers Association released the results of a survey today which showed that production and exports are already decreasing and unemployment is on the increase. The Association noted that some 16,000 workers were absorbed into public service jobs in the first three months of this year, contrary to the government’s policy which is to shift workers from services to production.

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