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Lockdown will shutter 7,500 additional businesses, report says

75,000 businesses already closed this year, consultant firm says in estimate; Finance Ministry forecasts that third lockdown will cost economy NIS 3 billion a week

Shoshanna Solomon is The Times of Israel's Startups and Business reporter

Illustrative: Closed businesses for COVID-19 pandemic outbreak (Maridav; iStock by Getty Images)
Illustrative: Closed businesses for COVID-19 pandemic outbreak (Maridav; iStock by Getty Images)

A third lockdown in Israel will cause an additional 7,500 businesses to shut down, in addition to the 75,000 that have already closed down this year, due to the economic fallout of the coronavirus pandemic, consultants CofaceBdi said in a new estimate.

“Businesses that will shut down because of the added lockdown, have reached the limit of their abilities and their financing options, and they cannot negotiate added closures,” the consultancy said in a statement.

The government early Thursday announced a third national lockdown , in order to curb a resurgence of COVID-19, to take effect Sunday at 5 p.m. for at least two weeks. The restrictions will be extended for an additional two weeks if morbidity rates do not decrease significantly. The moves were approved by the cabinet overnight.

The CofaceBdi estimate is for a lockdown that lasts three to four weeks. The data was first published in TheMarker financial website, which also reported that the Federation of Israeli Chambers of Commerce forecasts that the third lockdown will cause an average daily loss of productivity of some NIS 1.8 billion ($559 million). In an additional forecast, the Finance Ministry said that the third lockdown, as outlined, will cost the economy NIS 3 billion a week.

Self-employed Israelis protest at Rabin Square in Tel Aviv, calling for financial support from the Israeli government in the face of the coronavirus pandemic, on July 11, 2020. (Miriam Alster/Flash90)

The lockdown rules will bar Israelis from entering another person’s home, except for immediate family members; restrict movement to 1 kilometer from home, with exceptions, such as for for medical reasons; shut down commerce, leisure and entertainment; limit public transportation to 50 percent capacity; and limit workplaces that do not deal with customers face-to-face to 50% capacity.

Restaurants will be allowed to do delivery, but takeout orders will be banned. Gatherings will be restricted to 20 people outdoors and 10 indoors, and individual sports activities, such as jogging, will be allowed.

The terms are similar to the last lockdown, in September. But, in contrast to previous lockdowns, the education system will continue to function partially. Kindergarten, grades 1-4, and grades 11-12 will hold classes from 8 a.m. to 1 p.m. Parents will be able to drop their children off at 7 a.m. and pick them up at 2 p.m. Special education programs will continue as usual.

Companies that have managed to adapt to the new circumstances by turning to online sales, deliveries and video-conferencing have increased their chances to survive, and will possibly survive this next lockdown as well, CofaceBdi said.

The most vulnerable firms are the small ones, CofaceBdi said, with up to five workers; retail stores; restaurants and travel-related businesses; one-on-one service providers such as personal trainers or cosmeticians; and business service providers, including security services, accounting, advertising and cleaning services.

The lockdown will be extended beyond two weeks if the number of daily infections remains above 1,000 and the viral basic reproduction number remains above 1, the government said. The basic reproduction number is the average number of people each virus carrier infects.

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