OECD Forecasts 6.2 Percent Negative Growth

Israelis shopping at the Mahane Yehuda market in Yerushalayim. (Olivier Fitoussi/Flash90)

The OECD (Organization for Economic Co-operation and Development) economic forecast for Israel has turned out to be considerably gloomier than Israel’s own projections.

The OECD assessment warns that the Israeli economy will shrink (negative growth being an oxymoron) by 6.2% this year, versus the Bank of Israel’s sunnier 4.5%.

That’s if the reopening of the economy proceeds without a second wave of coronavirus. Otherwise, the number would be more like 8.3%.

However, the OECD did allow for a GDP growth rate of 5.7% in 2021, once the pandemic is behind us.

The OECD forecasts unemployment in Israel falling to 7.5% by the end of 2020 and to 6.6% by the end of 2021, assuming that there is no second wave of the virus.

On that assumption, the OECD envisages state deficit will reach 11.1% of GDP by the end of this year, and will fall to 8.4% by the end of 2021.

Meanwhile, the Employment Service said on Wednesday that 318,262 Israelis have returned to work since the government eased lockdown restrictions last month.

5,059 have returned to work in the past 24 hours, while 964 have been laid off.

At the height of the pandemic, approximately 1 million Israelis were out of work.