    [Public Papers of the Presidents of the United States: William J. Clinton (1998, Book I)]
    [February 25, 1998]
    [Page 285]
    [From the U.S. Government Publishing Office www.gpo.gov]

    [[Page 285]]

    Message to the Congress Transmitting a Report on the Loan Guarantees to
    Israel Program
    February 25, 1998

    To the Congress of the United States:
        The attached report to the Congress on the Loan Guarantees to Israel
    Program was completed on December 31, 1997. Since then there have been
    several key, positive economic developments in Israel that I wanted to
    communicate to the Congress.
        The Israeli Knesset passed its 1998 budget on January 5. The final
    budget adhered to the deficit target of 2.4 percent of gross domestic
    product (GDP) set by the Israeli Cabinet in August 1997, and established
    a spending target of 46.3 percent of GDP (down from 47.3 percent in
    1997), without resorting to additional taxes. Furthermore, due partially
    to the mid-year spending cuts discussed in the report, the Government of
    Israel over-performed the 1997 deficit target of 2.8 percent of GDP by a
    significant margin; the 1997 budget deficit came in at 2.4 percent of
    GDP. These events demonstrate the commitment of the Israeli government
    to fiscal consolidation and reform.
        Second, the Israeli consumer price index (CPI) for 1997 rose by only
    7 percent, at the bottom of the 7-10 percent 1997 target range and a 28-
    year low. This indicates that the battle being waged by the Bank of
    Israel and the Israeli government against persistent inflation is
    succeeding. The Israeli Ministry of Finance is reportedly considering
    lowering the 1998 inflation target (currently set at 7-10 percent) in
    order to consolidate the strong inflation performance registered in
    1997.
        This information will be included in the 1998 report to the Congress
    on the Loan Guarantees to Israel Program.

                                                          William J. Clinton

    The White House,

    February 25, 1998.