Some industry experts in Israel are warning that if the Israeli government is unable to get a handle on the coronavirus, the Jewish state could face a major economic calamity.
The Jerusalem Post reports that Arnon Bar-David, the leader of Israel’s Histadrut trade union, said on March 10, “This is the final hour, the last call, before the total collapse of entire industries in the Israeli economy,” citing layoffs in various industries as an example. He urged Israeli Prime Minister Benjamin Netanyahu to issue grants to business in tourism and aviation. Histadrut (General Organization of Workers) is a national trade union representing the majority of the country’s trade unionists.
“If the government does not wake up, and the prime minister does not start managing the situation, working together with the Histadrut and the employers, then we are on the verge of the Yom Kippur of the Israeli economy,” Bar-David said.
Israel Hotel Association President Amir Hayek also gave a statement to the Post warning that 60% of employees in the hotel industry could suffer layoffs because of the slowdown in tourism as fear of the coronavirus spreads unless the government provides some form of financial assistance. Reportedly, about 4,000 of the 41,000 hotel workers have been put on unpaid leave and layoffs among temporary workers have begun.
However, Bank of Israel Gov. Amir Yaron said that many economists expect any economic damage to subside at the end of June and the economy will rebound — assuming that Israel is able to successfully contain the virus, according to the Times of Israel. He encouraged banks to tap into their $4 billion in surplus capital.
“If each bank and the other banks in the system ease their credit policy even slightly, it will help in overcoming the cash flow difficulties that may weigh down on healthy economic activity, and the economy will weather the intermediate period,” Yaron said.
On March 9, Netanyahu announced that all travelers entering Israel will be quarantined for 14 days.
“This is a difficult decision, but critical to maintaining the health of the Israeli public,” Netanyahu said. “And the health of the public is above all. The decision will be in force for two weeks, and at the same time we are making decisions to preserve Israel’s economy.”
According to Bloomberg, the coronavirus could result in $2.7 trillion in lost GDP output worldwide.