Prime Minister Benjamin Netanyahu on Tuesday said Israel’s economy was well prepared for a coronavirus outbreak amid rising fears of economic fallout from the virus.
Netanyahu called a meeting to address the issue in Jerusalem attended by the head of the National Security Council, Meir Ben-Shabbat, the Finance Ministry, the governor of the Bank of Israel, and private sector business representatives.
“A steady hand is on the steering wheel,” Netanyahu said. “We are meeting on a daily basis and there is a very orderly division of the areas of responsibility, management and backing.”
“I ask that Israeli citizens listen to the instructions that we give. We will work together and overcome this crisis,” Netanyahu said. “Our policy is one of overpreparation, and not underpreparation, and above all, caution, but not hysteria.”
Ben-Shabbat was put in charge of organizing the group’s response going forward, in coordination with the Finance Ministry.
Dr. Ron Tomer, head of the Manufacturers Association, said: “Israeli industry stands alongside the government in ensuring continuity of function in any scenario.”
“We are working with the economic ministries in order to ensure an economic safety net for the private sector that will facilitate continued economic activity,” Tomer said.
The Economy Ministry has opened a “situation room” to carefully track the damage to the Israeli economy from the outbreak, with officials already seeking funding for airlines hurt by the sudden decline in travel.
The Tel Aviv Stock Exchange continued its decline on Tuesday, with the TA-35 index dropping by 0.08% and the TA-125 index falling 0.32%.
The Finance Ministry estimated on Monday that the epidemic could cause up to a one percent drop in Israel’s economic output. The expected shortfall amounts to between NIS 3.6 billion ($1 billion) and NIS 14 billion ($4 billion).
Finance Minister Moshe Kahlon convened an emergency meeting on the virus on Monday in Jerusalem, holding talks with finance authorities and the Bank of Israel.
Shira Greenberg, chief economist for the Finance Ministry, said that macroeconomic activity has not been affected by the virus outbreak. But the ministry has received reports from companies of potential damage from the virus, and some major companies have reported losses already.
Transportation Minister Bezalal Smotrich said last week that El Al Airlines already lost $50 million due to the crisis.
A budget official said that the Health Ministry is likely to see a significant increase in expenses due to the virus. Government budgets are currently frozen due to the year-long political stalemate, and fears have also arisen that the virus could chill turnout when Israelis go to the polls next week.
Prof. Amir Yaron of the Bank of Israel said at the meeting that if the crisis continues and hits more countries, and Israel is forced to take more severe preventative measures, the economic impact will be significant, but difficult to estimate.
Tourism in particular is likely to see a decline, and fewer foreigners will visit Israel, which has already closed its borders to residents of China, South Korea and elsewhere.
Kahlon ordered an internal Finance Ministry team set up to monitor virus-related developments.
Israeli trading partners, including China, are likely to suffer a significant hit to their economies due to the virus, which could in turn affect Israel. Uncertainty and fear could curb investments, and workers could be kept home due to illness or quarantines.
More than 80,000 people have been infected globally from the viral outbreak that began late last year in China, and more than 2,600 people have died from the virus in mainland China.
The virus has also infiltrated dozens of other nations, including in the Middle East, where dozens of cases have now been reported in Iran. Tuesday saw the first reports of the virus in Croatia, Austria and Switzerland.