Israel's soaring inflation rate rose another 9.4 percent in the last month, making the annual rate about 180 percent and setting the stage for a possible cabinet crisis Tuesday when the government tries to come to grips with a steadily deteriorating economy in an election year.
The cumulative inflation for the first 11 months of this year has hit a record 121 percent -- among the highest in the world -- and has presented Prime Minister Menachem Begin with potentially the most damaging issue in his stormy four years in office. By comparison, inflation in the United States is running at about 12 percent a year.
Finance Minister Yigael Hurvitz, who is also deputy prime minister, has threatened to resign if his proposed budget of approximately $9 billion for next year is not adopted. If Hurvitz resigns Tuesday or after a few more days of cabinet squabbling, he could be expected to vote against the Likud government in a parliamentary vote of no-confidence, and possibly take with him the other two members of his Rafi faction. It is widely presumed here that Begin, who barely survived a no-confidence motion last month, could not withstand such defections.
The November inflation rate, announced today by the Central Bureau of Statistics, will intensify pressure on the cabinet to make sweeping spending cuts that are certain to be politically unpopular in an election year.
But Hurvitz' insistence on a 10 percent cut in defense spending -- which accounts for 35 percent of Israel's annual budget -- has put him in direct conflict with Begin, who also is serving as defense minister. Begin has said he doubts whether the military could sustain such cuts without sharply reducing its manpower and compromising Israel's security.
On Sunday, the 22-member cabinet failed to reach agreement on the rough outlines of Hurvitz' budget proposals. Some ministers said they could not countenance major cuts in an election year and others refused to consider an over-all budget until more details are available on specific departmental allocations.
Outside the cabinet room, Hurvitz told reporters he is prepared to resign if his outline is not adopted. But he reportedly toned down his threat in private with the ministers, saying that if they reject his budget, "let someone else propose a different one."
Senior officials in the government tonight said they expect Begin to "paper over" the controversy in Tuesday's cabinet session. But they predicted the government would collapse in a week or two over the economic issue.