The Finance Ministry issued an optimistic projection for the Israeli economy's performance in 2021, citing the country's exit from the third lockdown imposed over the coronavirus pandemic.
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Monday's prediction said that the Israeli economy is expected to grow by 4.9% in the coming year. However, should another lockdown be imposed over the pandemic, growth rates would be only around 2.8%, the ministry said.
The ministry further predicted that in a COVID-free economy, unemployment rates, currently at 18.2%, would drop to 6.5% by late 2021 – closer to their pre-pandemic rates of 4%.
A more sober scenario of another lockdown would see the unemployment rate decrease to 9.5%, the report said.
Also on Monday, the Finance Ministry pegged Israel's fiscal deficit at 12.4% of the gross national product, or NIS 174 billion ($52 billion), for the 12 months ending on February 2021.
The deficit has been expanding monthly since the pandemic first hit Israel in March 2020. Government expenditure in February 2021 was NIS 38.8 billion ($11.7 billion), including NIS 6.9 billion ($2 billion) in financial aid measures, financial daily Globes reported. Government revenues in February 2021 totaled NIS 27.9 billion ($8.36 billion).
According to Channel 12 News, while the country's GDP contracted by 2.4% compared to 2019, a total of 5.4% if the initial 3% growth estimate is taken into account, Israel's hit was limited compared to that of other member-states of the Organization for Economic Cooperation and Development, which stood roughly at 4.2%.
According to the report, Israel's high-tech industry continued to grow at a fast rate amid the pandemic. Other industries that suffered a major blow constitute only a small share of Israeli exports, in contrast.
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