If Coronavirus Doesn’t Kill Us, What About an Economic Collapse?

During one of the late-night meetings this past week with senior economic officials, the parties discussed the cost of the coronavirus pandemic to Israel’s economy – an estimated 30 billion to 100 billion shekels ($26 billion). These numbers were based on the assumption that the worst of the crisis will happen in April and May, and that as summer approaches, things will start improving.

Where does this forecast come from? Indeed, it’s not sure what will happen, but the prediction caters to the human need to seize on a forecast of some kind for the time being. The farthest that we can see at the moment is a bit after Passover. What will happen afterward? No one has any idea.

The discussions include economists and experts who have seen a crisis or two in their lives. But the short periods for which forecasts are being drafted are tied to the fact that no one has seen a crisis quite like this – for example, the speed at which the virus has spread. Plus there are the enormous requests being made of the public as the crisis severely crimps both supply and demand.

And especially, there’s the complete uncertainty regarding when the authorities will get the crisis under control and how many companies and employees will fall victim along the way. The statistic of how many people are ill has Israelis particularly concerned, and is updated every few hours. But there’s also a statistic no less frighting: businesses shuttered and employees laid off or on unpaid leave on a massive scale and at a frightening pace.

Anyone who thought two weeks ago that this was a problem mainly for hotels and airlines discovered very quickly that it affects nearly all sectors – commerce, industry, services, communications, transportation, energy and the public sector. No industry is immune to the crisis, and the longer it continues, the more businesses and workers will be sucked in. The National Insurance Institute estimates that Israel will have 400,000 unemployed by the end of the month.