"GDP will shrink by more than 8% this year and private consumption will collapse by 12%"

"The Israeli economy is facing a severe recession and GDP is expected to decline by 8.3%, which means growth is expected to be negative and stand at 8.3%. If a second outbreak of the Corona epidemic occurs later this year, and 6.2% if the epidemic goes away by the summer. "
This is the sharpest recession since the establishment of the state, and the forecast is much gloomier than that of the Bank of Israel, which estimated the impact on GDP at only 5.3%. The decline in growth, according to the optimistic outlook, is also stronger than the world average (6%), but less than the expected west (7.5%).
The OECD notes that the containment measures taken in Israel were stringent, but they immediately disapproved and added that they were also "shorter than other OECD countries", although they were able to "flatten the curve".
The opening report on Israel states that economic recovery will be gradual and GDP levels will remain below pre-crisis levels by the end of 2021; that is, only in early 2022 will we see first signs, if any, of this "as a result of high unemployment and uncertain local demand. , As external demand is slowly recovering, "the language of the report reads. According to the more pessimistic scenario of "double hit, an increase in corporate insolvency as well as prolonged unemployment is expected, which will further slow down recovery and land long-term damage on Israel's economy," the economists write. It should be noted that companies in the event of insolvency companies will not be able to meet the repayment of their liabilities, whether suppliers or banks - leading to insolvency, asset collapse or liquidation.
 According to the report, the unemployment rate in Israel is estimated to be more than 25%, as the OECD did not convince the CBS definitions that employees who left the workforce are employed for anything and everything, which is "absent from work for a week or more" (the definition of language). Of CBS). According to the OECD, as of the end of April, there are about one million and 60,000 unemployed Israelis, and in this context, the forecast is bleak: "The vast majority of unemployment benefit claims (close to 90%) are from employees who are posted to the workforce who may return to their jobs. Once the economy recovers. However, at least some of the temporary layoffs may be fixed in light of the severity of the crisis. "
The OECD economists praise the economic policy being taken, writing that "the government of Israel and the central bank have taken appropriate measures to support households and provide liquidity to companies." However, they declare that "fiscal policy should remain supportive until recovery gets on track." That is, the OECD also notes that budget cuts and tax hikes are undesirable at present.
If the recovery is weak, additional policies may be needed to maintain employment, while strengthening vocational training and further increasing small business liquidity. If financial conditions tighten, the central bank can expand its financial asset purchases, ”the report said.
The forecasts for the Israeli economy - like other countries in the developed world - are gloomy, especially in the case of a second wave that will, again, require extreme social remoteness:

Not only will GDP fall by more than 8%, but private consumption - the engine of the Israeli economy in recent years - will collapse by 12%; Equally severe, investments in the economy (signaling future growth, AP) will fall by more than 17% in 2020 alone.
In addition, exports are expected to shrink by 10%. Under the same scenario, Israel will enter deflation (a 0.6% drop, AP), the deficit will jump to 12% of GDP and be the highest in the organization except for the US, with the debt-to-GDP ratio flying to around 87% Of GDP compared to 61% of GDP - erasing the past 15 years in the field. Even in the pessimistic and difficult scenario, growth in 2021 will be very moderate and will only be 2.6%.
According to the more optimistic scenario - that is, without a sharp second wave of an outbreak that will "shut down the country" - the recovery is expected by 2021, when growth is expected to jump 5.7%, private consumption will rise by 9% and exports will increase by 7% %. On the other hand, the deficit is expected to climb to more than 8% of GDP, with debt reaching 80% of GDP.
In addition to the forecasts, the OECD economists also incorporate a number of policy recommendations, in light of developments in Israel. Thus, the organization recommends that if the recovery is delayed, "some of the government's measures that support income will require extension," especially if a second wave calls for a resumption of the economy. In other words, the OECD encourages the government to extend the incentive policy to ease the population affected by the crisis.
The OECD also notes that the Treasury Business Guarantee Program is relatively poor compared to other OECD countries, and "can be expanded, especially for small businesses that need liquidity."
This time, too, the organization is calling for a plan to integrate a broad infrastructure plan with an active labor market policy - including investment in vocational retraining and job search support, especially in industries where it is clear that workers who have been unemployed are going to lose their jobs. "More efficient re-allocation"