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August 2, 2020 7:18 pm

Israeli Finance Ministry: It Could Take Five Years to Recover From Economic Effects of Coronavirus

avatar by Benjamin Kerstein

Passengers wearing masks push trolleys at Ben-Gurion International Airport, near Tel Aviv, Israel, amid the coronavirus disease (COVID-19) pandemic, May 14, 2020. Photo: Reuters / Ronen Zvulun.

Israel’s Ministry of Finance threw cold water on the possibility of a rapid economic recovery on Sunday, with the publication of a report that estimated it could take five years to restore the economy to its pre-coronavirus levels.

Israel’s Channel 13 reported that the ministry forecast that unemployment levels will drop back to pre-corona levels only in 2025, and the negative growth for 2020 alone will be somewhere between 5.9% and 7.2%.

In addition, a full one-third of all jobs in the business sector were made redundant during a nationwide coronavirus shutdown. “There is significant uncertainty about the extent of recovery in the face of the continuing health crisis,” the report said.

In addition, said the ministry, the possible path toward recovery and further developments in the medical efforts to combat the virus also remain extremely uncertain.

The ministry stated that the damage to growth and the slowing of the rate of recovery will be substantially exacerbated if the rate of infections spikes again.

If this proves to be the case, and a “third wave” of the virus takes place, the Gross Domestic Product will shrink by 7.2% in 2020 and grow by an anemic 2.2% in 2021, far below the number required for recovery.

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