"If a Corona vaccine will be available in Israel by mid next year - growth will amount to 5%"

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by Ifi Reporter Category:Capital Market Nov 10, 2020

"If the vaccine for Corona is available in Israel in the middle of 2021 - growth in Israel in the coming year will be relatively positive, at a rate of 4.8%. But in a continuing morbidity scenario - growth will reach only 2.2%, which is close to zero per capita growth. This first forecast, since yesterday's announcement by Pfizer about the success of its vaccine trial for Corona, was made today (Tuesday) by the chief economist at the Ministry of Finance, Shira Greenberg.
This is in the context of presenting the macroeconomic situation of Israel, against the background of the corona crisis, at the 35th annual meeting of the Economic Development Forum between Israel and the United States, which was launched today.
The Deputy Commissioner for Budgets, Yogev Gardos, presented the economic plan of the State of Israel to deal with the corona crisis and the various tools provided to individuals and businesses in Israel. The Director of the Macroeconomics and Policy Division of the Bank of Israel's Research Division, Adi Brender, and the Director of the Bank of Israel's Research Division, Michel Strawczynski, presented the Bank's growth forecast and macroeconomic and monetary analysis.
The Minister of Finance, Israel Katz, who is in isolation, opened the meeting that is taking place this year at a video conference, while emphasizing the importance of economic cooperation and the strategic connection between the two countries. "There is a deep commitment between Israel and the United States to economic cooperation," he said. "The current administration's efforts to bring about normalization agreements will help develop the entire region and promote strategic projects such as the peace train project that I initiated and I promote. The economic dialogue between the Israeli Ministry of Finance and the United States is a strategic dialogue, and the strong alliance between the United States and Israel continues to contribute to the development of the entire region. "
U.S. Treasury Secretary Stephen Manuchin addressed the strong ties between the countries, and the commitment to economic cooperation especially in these times. "There has been a deep commitment between the parties for many years," he said. "We have a goal of producing an international and prosperous economy so that the economic relations between the countries involved in the Middle East will be prosperous and successful together with the Emirates, Sudan, and Bahrain for a better and more prosperous economic future. Israel is an economically prosperous country in the Middle East, a leader in technology, science, entrepreneurship and energy. "Thanks to all this, we were able to deal with the plague and we will continue to deal with it."
The Governor of the Bank of Israel, Prof. Amir Yaron, stated that "the Corona virus has met the Israeli economy in a good situation, in a situation of low debt-to-GDP ratio and fiscal stability achieved over many years. The consequences of the crisis have already led to a sharp rise in the deficit, which is expected to continue to grow, and with it the debt-to-GDP ratio.
"During the crisis, the Bank of Israel implemented a variety of political tools, including rapid measures to stabilize financial markets, reduce the cost of credit and measures to ensure economic stability.
The Deputy CEO of the Ministry of Finance, Eran Yaakov, presented the grants provided in Israel. "The Israeli economy entered the crisis at a good starting point, high growth rates, unemployment rates at an all-time low, and a debt-to-GDP ratio of 60%. "All of these allow the government to act and provide financial assistance to the citizens," he said.
Greenberg added that "on this day we mark the opening of the economic dialogue with the US administration, which indicates the strong and strategic economic ties that exist between the two countries. The Corona crisis poses significant economic challenges for the countries discussed in dialogue. The State of Israel is in the process of exiting a second block, while countries around the world are now entering health restrictions.The period between the closures in Israel was reflected in a rapid recovery in a variety of economic indicators such as credit card purchases, fuel consumption, etc. There was some recovery in the labor market. "The unemployment rate was significantly higher than before the crisis."
Deputy Budget Commissioner Yogev Gardos said that "the ongoing dialogue between the two countries has made a significant contribution to improving the standard of living of the citizens of the two countries since it began in the formulation of the stabilization plan in 1985. The need to formulate economic policy is especially important." "The government's economic policy focuses on several areas of action. First and foremost, to find a balance between economic and health considerations, to provide support under the economic program to deal with the effects of the crisis, and to formulate reforms for economic growth and job creation within the state budget."
As part of the discussions, which will continue today, various issues will be discussed: regional economic cooperation following the normalization agreements, the most prominent of which is the Regional Peace Railway Project; The removal of regulatory barriers in the field of financial services and fintech and the establishment of a joint team of the Israeli and American governments that will examine the adaptation of the regulation to business cooperation between the countries; Green energy projects, water recycling, and regional energy projects; Discussion on the renewal of the tax treaty between Israel and the United States, which is expected to regulate the tax distribution of individuals and companies operating in the two countries and will reduce barriers to the business activity of Israeli companies in the United States.

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