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Israeli Officials Warn of Dangers to Economy

June 12, 1972
See Original Daily Bulletin From This Date

Three Israeli officials concerned with the nation’s economy warned today of danger signs ahead. Finance Minister Pinhas Sapir told a meeting of the Herut Social and Economic Club here that a recession such as occurred in 1966 could be prevented only if steps are taken to curb the inflationary trend and the public ends its buying spree. He warned that a new recession would hurt much more than the last one.

Gen. Haim Bar Lev, the Minister of Commerce and Industry, said that while Israeli industry has made giant strides it is not yet a healthy industry because it suffers from lack of modern production methods and does not enjoy cordial labor relations. He said that in many cases factories lack sufficient liquidity to keep running. Gen. Bar Lev spoke at a meeting of the kibbutz industries. Moshe Zanbar, Governor of the Bank of Israel said at the Labor Council Club that while Israel’s economy has registered significant achievements-a 40 percent increase in exports during the past two years-more attention must be paid to efficiency. He said he opposed subsidizing faltering industries but favored Government grants to encourage the development of promising enterprises with export possibilities.

Sapir dismissed talk of reduced defense expenditures in the future. The defense budget will continue to have a heavy impact on the economy, he said.

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