The shutdown of Israel’s economy due to the coronavirus pandemic will come at a cost of up to NIS 130 billion ($36 billion), which is 10 percent of the nation’s GDP, Israel’s Finance Ministry warned on Tuesday.
Bank of Israel Governor Amir Yaron said that Israel would spend NIS 90 billion ($25 billion) to battle the pandemic “in a short-term scenario,” and NIS 130 billion “in a longer-term scenario.”
“Without health, there is no economy, but without an economy, there will be no health,” he added.
Yaron went on to explain that the extent of the economic blow would depend on government policy.
“I am in daily contact with the prime minister. Right now, the ball is in the Knesset’s hands, and I am calling on the Knesset members to rise above political considerations,” said Yaron.
“This is the time to support businesses. To enable businesses to recover once the restrictions are lifted, we have to help the people who have been hurt and the ones who have been laid off,” he said.
For now, the Bank of Israel has not lowered the interest rate, unlike many other countries, but on Tuesday, Yaron said: “If things get worse in the financial markets, the Bank of Israel has additional monetary tools that it will not hesitate to employ.”