The Israeli government decided this week that starting this coming Sunday, the State of Israel will enter a third closure following the increase in the incidence of corona virus. Today (Friday), the Bank of Israel published its estimate of the cost of the total closure on the state, which currently stands at about NIS 2.5 billion each week.
In its announcement, the Bank of Israel noted that the second closure imposed on the state in October was estimated at a total value of NIS 3.2 billion each week, about NIS 700 million more than the estimate in the current closure, because at this stage the third closure guidelines are less severe than the second closure. This is in addition to the Bank of Israel’s assessment that some of the businesses in the economy will continue to operate despite the closure.
Instructions for the third closure (Photo: Avshalom Shashoni)Despite this, the Bank of Israel anticipates the possibility that the cost of the third closure will overtake the cost of the second closure due to two variables. The first, the estimate for the closure in October, is a monthly estimate, even though at the end of October, beginning on October 19, the easing of the closure was activated. The second reason, during the period of the second closure, all the Tishrei holidays were celebrated, a period in which economic activity is in any case lower than normal. The third closure, however, will not apply on holidays but on weekdays.
Estimating the cost of closure does not include ongoing costs incurred, for example, from business bankruptcies and ongoing unemployment. In light of all these data, the Bank of Israel has determined that, in its estimation, the weekly cost of the closure will be, as stated, NIS 2.5 billion, an amount that reflects an activity rate of about 90% of the economy.