The financial crisis triggered by the coronavirus pandemic has affected the livelihood of hundreds of thousands of Israelis, and many are struggling to stay on their feet, financial analysts said Sunday, in the wake of new Justice Ministry data reporting of a staggering, 75% spike in bankruptcy applications over the past few weeks.
In June alone, 2,038 Israelis filed for bankruptcy, compared to 1,165 applications in June 2019, the ministry said.
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The data further showed that most bankruptcy applications were filed by businesses in the restaurants, tourism and events industries, which have been crippled by the restrictions imposed on travel and public gatherings as part of the government's efforts to stem the outbreak.
Israel's economy, often lauded for being one of the most stable in the world, was forced to slow down to about 15% activity with the public and private sectors shuttering in early March as part of the battle against COVID-19.
While Israel has been gradually resuming economic activity over the past few weeks, the corona crisis has caused unprecedented unemployment of 26% at the hight of the first outbreak – compared to 4% in the pre-corona era.
The Central Bureau of Statistics said last week that unemployment fell from 21% at the end of May to 10.7% in June, as 450,000 Israelis who were on unpaid leave returned to work in the first two weeks of the month.
Still, the spike in the number of COVID-19 cases has prompted the government to again impose a series of restrictions on the public that are bound to slow the economy down, dealing another blow to small businesses and self-employed Israelis who are still reeling from March's lockdown.
The government has already injected an unprecedented 100 billion shekel ($28 billion) into the economy as part of its financial bailout plan. Last month, Prime Minister Benjamin Netanyahu announced a new bailout package for Israelis who have lost their livelihoods due to the coronavirus crisis, saying the measures would provide an economic safety net for the coming year.
Last week, he also approved NIS 6 billion ($1.75 billion) economic stimulus plan meant to encourage private consumption, but the government has yet to vote on how to distribute the funds.
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