Search and Hit Enter

Israel Finance Ministry said to predict NIS 11 billion ($ 3b) hit to economy in 6 weeks

The Finance Ministry has reportedly predicted the partial shutdown of the country taking effect on Sunday will cost the economy some NIS 11 billion ($3 billion) in six weeks.

The ministry’s chief economist, Shira Greenberg, estimated that the shutdown would cost NIS 4.5 billion (1.2 billion) if it were to last only three weeks. The lower number is based on the assumption that employers will fire fewer workers at the beginning of the crisis.

Greenberg presented the estimate to officials at the Prime Minister’s Office during discussions on the shutdown before it was announced on Saturday, in an effort to minimize the economic fallout, the Calcalist business daily reported.

The Finance Ministry was strongly opposed to a full shutdown, arguing that the Health Ministry’s effort to completely eradicate the virus was unrealistic, and that the outbreak should be managed in a way that did not cause economic collapse.

The director of the tax authority, Eran Yaakov, will hold a meeting on Sunday morning to discuss possible measures to respond to the crisis, including postponing payments from businesses.

In a harbinger of the likely economic consequences of the shutdown, the Castro clothing chain said after the announcement that it would close all 454 of its stores and place 6,000 employees on unpaid leave. Castro, Israel’s largest fashion company, said its online store will continue to operate as usual.

The Zara clothing chain also said it was closing all of its stores in Israel. Some malls will remain partially open to provide essential services in banks, pharmacies and supermarkets.

Restaurants will be allowed to continue offering food deliveries and pick-up orders.

The construction industry is expected to continue business as usual, since the new directives forbid 10 people from working together indoors, but not outside.

The industry relies on Palestinian workers from the West Bank. The government is working on a solution for having those workers in Israel in the event of a border closure, which may include issuing more permits for a total of 55,000, but limiting them to workers who are under age 55, and less susceptible to the virus.

The government may also require Palestinian workers to remain in Israel for longer periods to reduce the risk of cross-border infections. The requirement could also help the hotel industry stay afloat by providing it with customers while tourism to Israel is essentially shut down.

Security officials backed the proposal to allow the Palestinian workers into Israel during the crisis because their salaries help maintain stability in the West Bank, Calcalist reported.

The construction industry is expected to receive some 1,000 workers from China and 800 from Ukraine in the coming weeks. The workers will need to quarantine for 14 days in their home countries, and another 14 days in Israel, before beginning work.

Israeli banks have given construction companies some NIS 88 billion ($24 billion) in credit, so a collapse of the construction industry could threaten the banking system.

On Saturday night, Prime Minister Benjamin Netanyahu and government officials announced the shutdown of all leisure businesses and activities throughout the country, with the premier pressing upon the public the need to “adopt a new way of life” for the coming weeks and possibly months as the country deals with the new coronavirus — and particularly underlining a guiding principle of individuals maintaining a distance of at least two meters from others at all times.

Sunday morning will see public life further diminished, with the closure of all cafes, restaurants, hotels, malls, movie theaters, gyms, event halls and the like. It was implied, though not specifically stated, that all nonessential shops would close. But Netanyahu stressed that supermarkets, pharmacies, banks and other essential service providers would continue to function.

“This is a battle for public health,” Netanyahu said at a press conference from the Prime Minister’s Office in Jerusalem. “We are at war with an invisible enemy…We are adjusting as things develop. The situation is dynamic.” But, he said, “we can beat it.”

Comparing the situation several times to a state of war, the premier said it was imperative for Israelis to change gears and “adopt a new way of life” for the near future, noting that many Israelis appeared not to be heeding officials’ calls to avoid physical contact and displays of affection, but stressing that this was crucial for the nation to curb the spread of COVID-19.

The two most important issues, he said, were “personal hygiene” and keeping distance from each other. “A distance of two meters. This will protect us. It is very hard [but] it will help us stop infection.”

He stressed that authorities “will continue to ensure crucial services to the market. First and foremost on food — because there was a rush on supermarkets. We have more than enough stocks…including for Passover. There is no justification for [panic].”

Over the weekend Israelis flooded supermarkets to stock up amid fears the country could enter a lockdown and goods could run out — though officials repeatedly assured the public that there was no such danger.

Notably — raising major privacy concerns and prompting accusations of mass surveillance — Netanyahu also said the government would move to use invasive digital monitoring measures to track the movements of sick individuals, which had previously been employed against terrorism.

The number of Israelis diagnosed with coronavirus rose to 195 Saturday evening. The Health Ministry said two of the sick remained in serious condition, with 11 in moderate condition and the rest suffering a light illness only. Meanwhile, nearly 40,000 Israelis were in home quarantines for fear of exposure to the virus, including nearly 1,000 doctors, more than 600 nurses, 170 paramedics, and 80 pharmacists, according to Health Ministry figures. Health officials have conducted over 6,800 coronavirus tests nationwide so far, according to the ministry.

To curb the spread of the virus in the country, all Israelis returning from overseas are required to quarantine at home for 14 days. Non-Israeli nationals were barred from entering the country as of March 12, unless they can demonstrate an ability to self-quarantine for two weeks.

The number of coronavirus cases worldwide passed 150,000 on Saturday, with 5,764 deaths, driven by a spike in infections in Italy, according to an AFP tally compiled from official sources.

Header: An Israeli woman shops at a supermarket in Jerusalem on March 14, 2020 (Yossi Zamir/Flash90)