Unemployment continued to rise on Wednesday, reaching 19.6 percent with a total of 657,876 new registrants since the start of the month.
The numbers are expected to grow in the coming days as the government further tightens restrictions on work and movement in an attempt to stop the spread of the coronavirus.
The head of the National Employment Service said Tuesday that 1 million Israelis could be unemployed by Passover in two weeks.
Some 90% of people registering with the service have been placed on unpaid leave and the unemployment service expects 10%-20% of those to lose their jobs on a permanent basis when the coronavirus crisis comes to an end.
The Tel Aviv Stock Exchange opened with a positive trend on Wednesday morning, but leveled out as trading progressed.
The TASE jumped on Tuesday after weeks of steady decline as world markets recouped some of their losses amid hopes of financial aid packages aimed at mitigating the devastating losses caused by the coronavirus pandemic.
The Bank of Israel has taken a more assertive stance toward boosting the economy in recent days, while US markets climbed ahead of Congress agreeing on a massive fiscal stimulus package.
Bank of Israel chief Amir Yaron on Tuesday called for a NIS 15 billion ($4.2 billion) “safety net” for businesses.
Yaron said that if the current economic shutdown continues until the end of April, it will cost the economy some NIS 50 billion ($13.9 billion), or 3.5% of GDP. An additional month of stagnation would increase the cost to some NIS 90 billion ($25 billion).
If restrictions are tightened further, and continue until the end of May, the damage could amount to NIS 126.8 billion ($35 billion), Yaron cautioned.
“This is the time to support businesses and civilians, so the crisis doesn’t deepen, and to allow businesses and markets to recover from the crisis quickly when the health restrictions are removed,” he said. “Without health, there is no economy, but without economy, there won’t be health.”
The Bank of Israel and Finance Ministry have offered increasingly dire predictions about the virus’s impact on the economy after initially estimating a hit of less than 1% to Israel’s GDP.
The Bank of Israel said Monday that it would buy NIS 50 billion ($13.4 billion) in government bonds on the open market to ease credit conditions and bolster the economy.
The bank said it will continue to swap dollars and shekels to keep the currency stable.
The Bank of Israel has been less aggressive in its response to the pandemic than the US Federal Reserve, which slashed interest rates to near zero in a futile attempt to buoy markets.
In its Monday statement, Israel’s central bank appeared to shoot down hopes it would similarly cut interest rates, saying, “The Bank of Israel interest rate has for a long time been at low levels, which makes financial conditions easier for the business sector and households.” Its interest rate currently stands at 0.25%.
In government meetings on the shutdown, the Finance Ministry warned that if a total lockdown is applied the economy may not be able to rehabilitate afterwards, according to Channel 12 news. The Finance Ministry estimated last week that the virus will cause damage to the economy of some NIS 45 billion ($12 billion) and wipe out any projected growth.