ECONOMIC SURVEY - 23-Jun-96

23 June 1996

(COMMUNICATED BY GPO ECONOMICS DESK)

* DAN MERIDOR APPOINTED NEW FINANCE MINISTER.
In his first speech (19.6.96) after taking over from outgoing Finance Minister Avraham Shohat, Likud MK and incoming Finance Minister Dan Meridor said, "We need to take corrective steps in order to return and realign ourselves to proper growth, in which the balance of payments deficit, which has reached difficult levels, will be reduced to the required levels, and in which inflation will once again be reduced to more comfortable dimensions than we have seen in the past half year." He said that he would not take any drastic measures because the economy is not in a situation warranting a revolution. Meridor said that government expenditures are too high and that government intervention in the economy is too strong. (Globes, 19.6.96, p.1)
Finance Ministry - Eli Yosef, 972-2-317201

* BANK OF ISRAEL GOVERNOR TO SERVE SECOND FIVE YEAR TERM.
Bank of Israel Governor Prof. Jacob Frenkel has been asked by Prime Minister Benjamin Netanyahu to serve a second five-year term as Bank of Israel Governor. His appointment is expected to be approved by the cabinet in the near future. In addition, Prof. Frenkel will head an economic council that will advise PM Netanyahu on economic issues. He will also participate in all government discussions concerning economic issues and give advice on preparing the state budget.
Prime Minister's Office - Shai Bazak, 972-2-705555

MACRO-ECONOMIC SECTOR:

* UNEMPLOYMENT DOWN TO 6.3% DURING FIRST QUARTER OF 1996.
Israel's unemployment figure fell to 6.3% for the first quarter of 1996, compared to 7.0% during the same period last year, the Central Bureau of Statistics reported. When excluding seasonal adjustments, the unemployment rate for the first quarter was 6.6%; a rate which has stayed stable since April 1995 when the rate was 6.7%. Unemployment for women was 7.7% for the first quarter of the year, down from 8.1% during the last quarter of 1995 and 9.8% during the first quarter of 1995.
Central Bureau of Statistics - David Neumann, 972-2-6553400

* RETAIL CHAIN STORE SALES CONTINUE TO SLOW IN MAY.
The rate of growth in retail chain store sales continued to drop, to 0.7%, during May, compared to 0.9% in April, and 1.1% in February and March, the Central Bureau of Statistics reported. Food sales in retail chain stores also saw a slowdown in growth, as sales increased by only 0.8%, compared to 1.2% in March and April, and 1.5% in January and February. Sales in retail chain stores comprise 25% of all private consumption, and constitute 30% of all food sales.
Central Bureau of Statistics - David Neumann, 972-2-6553400

PRIVATE SECTOR:

* TOF TOYS TO HAVE TOYS MARKETED BY BRITAIN'S MOTHERCARE.
Tof Toys, a manufacturer of infant and toddler toys, reported that it has signed an agreement with Britain's Mothercare, which controls 50% of the British infant/toddler market, to have its toys distributed in the chain's stores. Tof Toys began exporting in 1995 and has total sales of approximately NIS 5 million annually. (Globes, 18.6.96, p.10)

* MADGE TO INVEST $10 MILLION IN JERUSALEM FACTORY.
Madge, the British-based computer connectivity concern, is planning to open a manufacturing plant in Jerusalem with an investment of $10 million, the company announced. Madge, whose subsidiary Madge (Israel) was formerly known as Lannet, reported that the factory will begin producing the concern's LAN products in January 1997. (Globes, 21.6.96, p.10)

FOREIGN TRADE: