Israel’s Economic Halt Will Cost at Least NIS 17 Billion
As Covid-19 spreads, economists say a decline of 1.2% in the country’s gross domestic product is likely the best case scenario; a pessimist scenario forecasts negative growth
Omri Milman | 14:42 16.03.2020
Attempts to evaluate the scope of the damages caused to the Israeli economy by the coronavirus (Covid-19) crisis are limited at best. While some damage can be estimated, such as the ramifications of businesses shutting down, there are questions that are much harder to answer. A leading economist, speaking with Calcalist on condition of anonymity, said that contrary to military events, where the current situation is clear but the ending is not, in the case of the pandemic, the ending is clear—the virus will be overcome at some point—but the current situation is not. The Israeli Ministry of Finance has estimated that if the local economy grinds to a partial rather than complete halt for just a few weeks, the weekly losses will amount to NIS 1.5 billion (approximately $401 million). According to this scenario, a month of partial shutdowns will cost the economy almost NIS 7 billion (approximately $1.87 billion), or 0.5% of the gross domestic product (GDP). According to Bank Leumi’s chief economist Gil Bufman, the optimistic scenario, which posits a full return to normal by the second half of 2020, forecasts damages of 1.2% to the GDP, worth almost NIS 17 billion (approximately $4.55 billion).