The International Monetary Fund on Thursday predicted that the Israeli economy is likely to lose 6.3% of the gross domestic product in 2020 over the coronavirus outbreak.
This was a gloomier prediction than the one issued by the Bank of Israel earlier this month, saying that the pandemic is likely to bite into 5.3% of the GDP in 2020.
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The IMF further said it does not believe Israel's economy would be able to return to its pre-pandemic level until 2022.
The Bank of Israel had said that the economic downturn would be more than compensated by 8.7% growth in 2021, according to financial daily Globes,
The IMF's forecast outlined a more modest rebound of only 5% growth in 2021.
The government had halted nearly all economic activity as part of its effort to curb the spread of the coronavirus. The shuttering of businesses has slowed economic activity to only 15%, forcing many businesses to either fire employees or place them on unpaid leave.
Since the measures were announced in early March, unemployment has risen to an unprecedented 26% – compared to 4% prior to the outbreak – with some 1,093,645 Israelis filing for unemployment benefits.
The International Monetary Fund's report further projected that Israel will end 2020 with 12% unemployment and ending 2021 with 7.6% unemployment.
The report also predicted negative inflation of 1.9% in 2020, compared with the Bank of Israel's forecast of -0.8%.
