Israeli bank notes. Photo: Pixabay.

JNS.org – The International Monetary Fund over the weekend said that Israel’s economy has an excellent chance of making a quick recovery from the recession triggered by the global pandemic, but urged the government to exercise prudent fiscal policies in the wake of the economic crunch.

According to a report in the financial daily Globes, the IMF’s latest review has found that the Israeli economy entered the COVID-19 pandemic from a position of strength, adding that the government’s rapid response to the crisis prevented it from dealing the economy a more serious blow.

“Timely and decisive measures introduced by the Bank of Israel at the outset of the pandemic have helped preserve market and financial stability and access to credit,” the report said, adding that the financial support provided to the healthcare system and the private sector also helped mitigate the coronavirus crunch.

The IMF further concluded that Israel’s economy has been hit less hard by the pandemic than other countries.

The findings did, however, urge prudent fiscal policies, citing both the uncertainty surrounding the overall global economic outlook and the IMF’s inability to predict how the pandemic will continue to evolve.

According to Globes, the IMF report recommends that “policies should continue to provide support to the economy, contain the risks associated with the pandemic and promote recovery.”

It further recommended that “structural policies should aim at mitigating labor market vulnerabilities, limiting the potential long-term impact of the pandemic, and fostering a more inclusive recovery.”

The International Monetary Fund predicts that 2020 will see the Israeli economy shrink by 5.9 percent, but IMF economist Iva Petrova said the Washington-based UN agency may revise this projection.