COVID-19 lockdown may last over a month: How will Israelis be affected?

Prime Minister Benjamin Netanyahu informed the nation via his Facebook page on Tuesday that the lockdown “could take a lot longer” than expected, with the implication it could last for a month or even more. The Employment Service released its latest data on the number of unemployed Israelis on Wednesday: 909,460 people. The longer the lockdown will go on, the more it will hurt the economy. The Finance Ministry predicts that a monthlong lockdown will cost the nation at least NIS 30 billion. The predicted losses will become steeper, as the High Holy Day period – when less people work – will end after Sukkot, and businesses that are expected to return to full capacity will face ongoing restrictions. Finance Minister Israel Katz called on the government to approve a gradual return of the private sector to its usual levels of activity in sectors that don't require face-to-face interaction. Katz suggested that, after Sukkot, 50% of businesses should be allowed to operate; and two weeks after that, all of them, provided they follow the “Beating Heart” program and the “Purple Ribbon” outlay. Katz stressed that Israel must have a strong economy to combat COVID-19, a press release on behalf of the ministry said on Wednesday. The lockdown is expected to have other costs as well. In July, the National Insurance Institute paid unemployment benefits to the tune of NIS 2b., while last year in July it paid just NIS 300 million. The number of Israelis reporting they are unemployed has gone up by 163,297 since Rosh Hashanah. The more people lose their jobs, the more the state is obliged to offer support until June 2021. The Bank of Israel reported that 17% of Israeli households previously having two employed persons (for example, a married couple with both partners working) now report that one person is out of work. In 2% of households both workers were fired, bringing the total number of households disrupted by the crisis to 19%, TheMarker reported on Wednesday. Families with wages of up to NIS 5,000 and NIS 10,000 reported a loss of income of 20.2% and 20.8%, respectively; those making up to NIS 15,000 reported a 16.4% loss. The average drop for all households has been 19.5%. As the average income per family drops, its consumption, in turn, will also drop – making the likelihood of businesses bouncing back lower as the lockdown continues. In the current lockdown exit plan, classes for third and fourth grades aren't expected to return until November, meaning parents of young children will be expected to work from home to help care for them as they attempt to study from home. Restaurants won't open as normal until the country will go down to 100 new COVID-19 patients per day, which is hoped to happen in late December. The total cost of keeping children at home and closing restaurants, cafés, cinemas and theaters until the year ends is unknown. On Tuesday, the Bank of Israel reported that it approved an extension period on payments owed by households until the end of the year. This includes mortgage payments and loans of up to NIS 100,000. The bank made it clear that “postponing return payments is, essentially, taking on a new loan which will have more costs.” In a Wednesday press release, the Arlosoroff Forum for Fair Employment claimed that the banks could have frozen such payments for several months without asking for any interest. “This isn't a real gesture of grace,” the forum claimed. While all banks agreed to join the outlay suggested by Bank of Israel, credit card companies Isracard and Max didn't, with Israel Credit Cards only partially joining the outlay.

COVID-19 lockdown may last over a month: How will Israelis be affected?

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COVID-19 lockdown may last over a month: How will Israelis be affected?

909,460 Israelis are currently unemployed, according to the Employment Service.

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