[Weekly Compilation of Presidential Documents Volume 34, Number 9 (Monday, March 2, 1998)]
[Pages 325-326]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
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

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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.