Return of the economy to full employment – 4 or 5 years – Economy

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The Ministry of Finance published this morning (Sunday) an economic forecast for the years 2023-2020, which takes into account two main scenarios, optimistic and pessimistic.

According to the optimistic scenario of a gradual recovery of the economy, this year (2020) the GDP of the Israeli economy will shrink by about 5.9 percent, while next year (2021) the GDP will grow at a rate of 5.7 percent.

The aggravation scenario, which assumes a further increase in morbidity that will lead to a tightening of restrictions on economic activity, the contraction in GDP this year will be more difficult, standing at 7.2 percent, while the recovery next year will be much more minor, only 2.2 percent growth.

The Ministry of Finance warns that the nature of the crisis is special and not similar to events that have occurred in the past, and therefore clarifies that care must be taken not to draw conclusions from the forecast.

As part of the forecast, finance economists estimate that in any case the return of the economy to full employment is expected to occur only four to five years after the outbreak of the virus.

The review shows that in the case of worsening morbidity, 2020 will end with an unemployment rate of 15% and in the case of recovery, the year will end with about 10% unemployment.

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