Finance: This is a loss of between NIS 14-3 billion • However, there is also an optimistic scenario, according to which Israel will grow precisely because of demand for its products • Exports to China will not be harmed because it is a technological service

• Works in eastern China // Photo: IP

Ministry of Finance in gloomy forecast following the spread of the Corona virus: slowing growth in the Israeli economy in 2020 to only 3%, compared with a surprisingly high growth of 4.8% in the last quarter, and a total of 3.6% in 2019.

The Treasury also warns that if the budget deficit leads to an increase in the debt-to-GDP ratio over the next two years, credit rating agencies will find it difficult not to respond. Experts estimate that the current political situation prevents convergence measures to reduce the deficit, but estimates that the measures will be possible after the government is assembled. The Ministry of Finance published a consensus forum forecast that includes all of Israel's leading forecasters and analysts, which took place in early February - about two weeks after the outbreak of the Corona virus in China.

The outlook still does not include the spread of the Corona virus to Iran, Japan, Italy, Spain, Tenerife, and other countries. It should be noted that at Monday's hearing at the Treasury Bureau, the chief economist at the Ministry of Finance presented two scenarios for the spread of the virus to Israel's economy in 2020: an optimistic scenario of GDP loss of 0.2%, about NIS 3 billion; a pessimistic scenario of 1% loss Whole product, about NIS 14 billion.

On the subject of the Corona virus, experts believe that in the central scenario, there is no expectation of a dramatic change in exports following the spread of the epidemic, due to the fact that part of Israeli exports to China is export services through Chinese research and development companies located in the country.

Nevertheless, there is concern about a slowdown in imports from China following the virus. In other words, there may be a significant impact on global trade that will also affect the Israeli economy.

There is also a particularly optimistic scenario whereby the Israeli economy may actually be favorably affected by an increase in demand for Israeli produce. The experts surveyed expect on average a continued rise in wages, and a moderate rise in unemployment.