The Bank of Israel estimates: In contrast to previous closures, the damage to the economy will decrease to about NIS 2.5 billion a week • "Business is better prepared"
NIS 5 billion - this is the minimum cost of the upcoming closure, according to a preliminary analysis by the Bank of Israel.
Photo: GPO
The closure will take effect starting tonight at 5pm, and will last for at least two weeks.
According to the Bank of Israel, the expected cost to the economy of the third closure is NIS 2.5 billion per week.
This is less damage to the economy than the two previous closures: in the first closure in April, the weekly cost amounted to NIS 5.4 billion, while in the second closure during the Tishrei holidays, it was NIS 3.2 billion per week.
In the coming closure, the Bank of Israel estimates that activity in the economy will be affected by only 10%, compared with 20% in April in the first closure and 12% in the second closure.
In the summer months, when the economy operated according to the "corona routine" (the purple mark), the volume of economic activity was 95% of normal, with weekly damage amounting to NIS 1.3 billion.
"At this stage, the closure instructions are less severe than those in the second closure," the Bank of Israel explains. "Workplaces without receiving an audience may continue to operate in part, and the education system for young people will operate in a normal format." The bank further explains that "it is likely that businesses in the economy continued to prepare for activity in the shadow of a closure. The closure in October was during a holiday period, when economic activity is lower than usual. However, now the closure will apply to normal business days (excluding holidays)."
The real damage: In the long run, the
Bank of Israel adds that in the long run the cost of closures will have a heavier weight for the economy: "Of course, this is only the direct cost during the closure period," they clarify. "It does not include ongoing costs incurred, for example, from business bankruptcies and ongoing unemployment.
It also does not include vulnerabilities such as infringement of freedom of movement, a benefit that is not priced in money (travel, family visit)."
