Opposition leader Yair Lapid blasted Prime Minister Benjamin Netanyahu Monday for saying that the Israeli economy was weathering the coronavirus pandemic, after figures released by the government reflected the steepest contraction of the economy in over four decades.
“Netanyahu responded to the terrible new economic figures by saying, ‘This is very good economic news.’ That’s not just out of touch, it’s dangerous. A prime minister during a crisis denies that the crisis exists. He denies reality. Nero fiddles while Rome burns,” Lapid said at his weekly Yesh Atid-Telem faction meeting, referring to a Sunday report by the Central Bureau of Statistics.
Surpassing the most dire economic forecasts on the effects of the coronavirus pandemic, Israel’s gross domestic product plunged by 28.9 percent in the second quarter of 2020 as compared to the first quarter, in the worst economic downturn in over 40 years, according to the official estimate.
The projections by the CBS, which will likely be slightly adjusted over time, came as Netanyahu downplayed the spiraling crisis and claimed the contraction was “almost the lowest in the world.”
“We just received very good economic news. The Central Bureau of Statistics announced that the decline in our GDP in the second quarter of 2020 was 7.8%, which is half the decline in the European states; it is almost the lowest in the world. South Korea is ahead of us and maybe two or three other countries,” Netanyahu said at Sunday’s weekly cabinet meeting.
The CBS figures indicated that the Israeli GDP slid by 7.8% compared to the second quarter of 2019. Private consumption shrunk by over 43%, due to the lockdown measures imposed throughout March and April, and imports dipped by over 41% as a result of the virus, the CBS said.
“This is the result of the responsible policy that we have undertaken, which not only reduced the number of deaths in Israel, but also the magnitude of the blow to the Israeli economy,” he continued. “We will continue to work for your livelihoods, for our economic future and for your health,” the prime minister added.
Lapid instead predicted further crisis and hardship.
“I don’t know if there will be elections in November, but I do know that there will be an economic crisis in November. Businesses will go bankrupt, people won’t be able to pay their mortgages, they’ll lose their homes. Young people will up and leave,” Lapid said of reports that the prime minister was pushing for a new national vote amid the economic crisis. “The numbers are scary. Thirty thousand businesses have already collapsed. By the end of the year, that number will rise to 70,000. Unemployment is at a record high. The coronavirus crisis has hit everywhere, but figures like this don’t exist anywhere else.”
An analysis of the economy by Channel 12 on Sunday night indicated that Israel’s position was better than those of the US and some European countries, but worse than numerous others.
Continued Lapid: “Compare these figures to Finland, New Zealand, Greece, Germany. They all have better numbers because there is one difference — in all those countries there is a functioning government that makes the right decisions. Here the government has failed, Netanyahu has failed… The government hasn’t only ceased to function, it has ceased to recognize reality.”
As the coronavirus outbreak hit Israel, the country was put into a lockdown in mid-March that all but brought the economy to a standstill. Unemployment rocketed from around 5% to 26%, and by April, over a million Israelis were unemployed.
Although the lockdown measures were mostly rolled back in recent months, unemployment is over 21%, according to the Employment Services figures last week, with nearly 882,000 people out of work.
The government has approved billions in aid for battered businesses and sent stimulus checks to most Israelis in efforts to revive the economy.
But the country also does not have a yearly state budget, amid a fight between Netanyahu and coalition partner Benny Gantz over whether to pass a one-year budget for 2020, or a two-year plan through 2021 as stipulated in their coalition agreement.
Lapid again called for Netanyahu to resign, saying that the premier cannot run the country while on trial for bribery, fraud, and breach of trust.
“Netanyahu has lost control of the economy and we will pay the price. During a crisis, a prime minister needs to make tough decisions, that’s the job. Netanyahu can’t make tough decisions because of his legal situation, not in a government of 36 ministers and not when he’s constantly on the way to new elections. His solution is denial, but that’s not a solution. The person who caused the collapse can’t fix it. Netanyahu needs to resign. It’s not too late to fix this mess but time is running out,” the Yesh Atid leader said.