OECD: Rising unemployment increase in insolvency cases after the second closure, will hamper a recovery in consumption and investment

"After a decline of 4.25% in 2020, the economy's GDP is expected to grow by 2.25% in 2021 and 4.25% in 2022," according to the OECD forecast for the Israeli economy published today. "Rising unemployment, and the likelihood of an increase in insolvency cases after the second closure, will hamper a recovery in consumption and investment, despite government support for households and business firms."
The OECD forecast takes into account a slower recovery of the economy from the second quarantine imposed on the economy compared to that recorded at the exit from the first quarantine, and expects a 2.3% recovery in GDP in 2021 before a recovery of 4.2% in 2022.
The OECD estimates that by the second half of 2021, GDP and external demand will strengthen as the effects of finding the vaccine for the corona are manifested, and that the unemployment rate will decline slowly, although at the end of 2022 it will remain higher than before the corona crisis.
"Macroeconomic policies need to remain supportive and adapt to changing circumstances," OECD economists wrote. "Extending the exceptional support measures until mid-2021 would be welcome, but it should be accompanied by training and job search assistance that will help the unemployed move to new jobs. Increasing investment in infrastructure and early childhood education can strengthen the recovery and help reduce socio-economic disparities."