The World - News from March 12, 1989

The Palestinian uprising cost Israel $666 million in 1988 and nearly wiped out its economic growth, and it may exact a similar toll this year, a Cabinet minister was quoted as saying. Gad Yaacobi blamed the losses on higher military spending, reduced production, lost tourism and a fall-off in foreign investment. Yaacobi, of the left-leaning Labor Party, was economics minister until November, when he became communications minister. Israel Radio quoted Yaacobi as saying that Israel’s $35-billion economy grew 1% last year instead of a forecasted 2.5%. In 1987, it grew 5%. An aide to Yaacobi said the minister believed the 1988 pattern could be repeated next year.