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Food prices rise as Israel cuts subsidies

Food prices in Israel rose between 20 and 25 percent Wednesday when government subsidies were cut. The budget cuts should save the government some $50 million by the end of the financial year in April, Finance Ministry officials said.

Food subsidies were used to hold down consumer prices before elections last June. Basic foodstuffs are still heavily subsidized, and the government plans to cut the subsidies back still more.

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Official figures show the cost of living in Israel rose almost 92 percent this year so far.