The coronavirus outbreak has a significant toll on the private sector, biting into 43 billion shekels ($12 billion) of its projected annual revenue, data published by the Federation of Israeli Chambers of Commerce on Thursday revealed.
According to the report, the industries hit hardest by the outbreak are the tourism and hospitality industries and non-food retail, which have all seen a staggering 80% drop in revenues.
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The government had halted nearly all economic activity starting in early March. The shuttering of businesses ordered as part of the efforts to curb the spread of the virus has slowed economic activity to only 15%, forcing many private-sector businesses to either fire employees or place them on unpaid leave.
Since the measures were announced, 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 unprecedented damage inflicted on the business sector and unemployment rate require resuming the economy's operations at an accelerated pace," federation president Uriel Lynn said in the report.
He noted that so far, the financial models offered by the state "are like putting a Band-Aid on a wound to the aorta."
The state's exit strategy from the month-long lockdown must detail "an effective business compensation process, which includes a fixed formula and clear criteria comparing revenue loss during the months of the crisis with the same period last year."
An analysis provided by the federation broke unemployment rates in the business sector 30% of the retail sector, 14% of the hospitality sector, and another 30% of service-related businesses.
Roee Cohen, who heads the Lahav Chamber of Independent Organizations and Businesses, recently told the Knesset's Special Committee on Dealing with the Coronavirus Pandemic that the implementation of the government-guaranteed loan plan for small businesses was "one big bluff."
He accused the banks of being unwilling to provide funds to at-risk businesses despite the fact that the Health Ministry declared that entire industries have no chance of resuming operations for the next five-six months.
"The banks crunch their numbers and see there's no chance of returning to work. Something is not right about this system."
Asaf Wassercug, deputy head of the Treasury's Budget Department, told the committee that the ministry is aware of the issue and is aiming to resolve the issues vis-à-vis the banks.
The International Monetary Fund said 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.
