The unemployment rate in Israel continued to rise and on Thursday rocketed past the 20 percent mark, as the National Employment Service said some 39,000 people had registered as unemployed since Wednesday.
Since the start of the month, 690,055 have filed as unemployed, 90% of them workers who were put on leave without pay. Some 59% of them are women, and almost half of the newly unemployed are between 20 and 34 years old.
The crisis has hit the tourism, restaurant and aviation sectors particularly hard, with layoffs and unpaid leave seen across the board.
Cumulatively, there are now nearly 850,000 jobseekers in Israel, or 20.4%.
Employment Service director-general Rami Garor said his organization was closely monitoring the effect the pandemic is having on the job market.
“Our estimate is that 20% of the employees who were ejected from the job market during the crisis will not retain their jobs” afterward, he said.
Garor added that by the end of the month, the details of all the new jobseekers would be handed to the National Insurance Institute so that they can get their unemployment benefits as early as possible.
He said that before the Passover holiday, which begins April 8, all of them were expected to receive advance payments of at least NIS 2,000 ($550), assuming most were only eligible to be paid for the last third of the month of March, when the most severe restrictions on workplaces came into effect.
The unemployment numbers are expected to grow further in the coming days after the government on Wednesday further tightened restrictions on work and movement in an attempt to stop the spread of the coronavirus.
Garor said Tuesday that 1 million Israelis could be unemployed by Passover.
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 would 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.
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 would 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 itself 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.