For the first time this year, total credit to the general public fell, by 1.5% in July compared with the previous month.

Bank of Israel figures show that total credit slipped by NIS 11 billion to 665.8 billion in July, due to the economic slowdown and credit crunch at some of the banks.

Unlinked credit eroded by NIS 4 billion to NIS 181.5 billion.

Linked credit fell by half a billion to NIS 564.5 billion.

Foreign currency-denominated credit dropped by NIS 3.5 billion to NIS 152 million, and credit from abroad shrank by NIS 2 billion to NIS 62.2 billion.

Total credit has grown much faster in recent years than Israel's product, a trend that has the Bank of Israel deeply worried. The result is evident in the commercial banks' increasing provision for doubtful debt.

This year alone, total credit has increased by 3.7%, after growing by 7.5% in 2001.

From 1991 total credit has increased by 550%, from NIS 96.7 billion at the end of that year.