The years after the 1973 Yom Kippur War were a lost decade economically, as growth stalled, inflation soared and government expenditures rose significantly.
The economic crisis created feelings of anxiety, confusion, and lack of trust in the government among the Israeli citizens.
In response, on July 1st 1985 the government of Shimon Peres implemented an economic stabilization plan[2] aimed at generating "sharp disinflation".
This was done after a series of smaller, so-called "package deals" that were negotiated with selected entities in the Israeli economy proved ineffective in stemming the rise of inflation.
Some of its main points included: These steps, coupled with the subsequent introduction of market-oriented structural reforms,[4] including the privatization of many government-owned businesses,[5] successfully reinvigorated the economy and paved the way for its rapid growth in the 1990s.