Governor of Israel bank Amir Yaron: we established a staff to analyze and monitor the economic aspects of Corona

Governor of the Bank of Israel Amir Yaron commented on the expected consequences of the spread of the Corona virus worldwide. He said this at a hearing in the Treasury with senior ministry officials.
He said that with the outbreak of the virus he ordered the establishment of a staff at the Bank of Israel to analyze and monitor the economic aspects of its outbreak and their possible macroeconomic impact on Israel. To this end, a dedicated team has been set up at a bank that regularly examines and analyzes developments in several different angles: global markets and the local market, the real impact on the economy, and the impact on the financial system and, in particular, the exposure of financial institutions and the banking system.
The outbreak of the Corona virus in China shows uncertainty about future economic activity in the world and in Israel, and the expected effects on inflation and financial markets. If the spread of the virus is halted in the coming months - similar to the baseline scenario that guides the estimates of most international economic institutions - the overall impact on the global economy is expected to be limited, and growth rate compensation is expected in the coming quarters. In the Bank of Israel's estimation, this scenario is not expected to have a significant macroeconomic impact in Israel, beyond the individual impact on various companies, even though China is a significant trading partner in a variety of industries.
China's centrality in the global economy, along with uncertainty about the magnitude of the virus spread, creates significant economic uncertainty. The uncertainty depends on two main levels:
1. The extent to which the virus will have an impact on other economies, including Israel, beyond the economy
Chinese.
2. The time it will take for the event to pass. If the crisis escalates and escalates to other countries, and especially if severe preventive measures are required in Israel, a more significant impact is expected, the scope of which is difficult to assess at this time. The strong basic economic data of the Israeli economy - among them a low debt-to-GDP ratio and a low unemployment rate, a current account surplus and a high level of foreign currency reserves and a robust banking system, increase the resilience of the economy.