Lockdown: The Heavy Economic Costs

YERUSHALAYIM -
A municipal inspector at the Mahane Yehuda Market in Yerushalayim during a lockdown earlier this year due to the coronavirus. (Yossi Zamir/Flash90)

In the best-case scenario–of a lockdown that’s over in two weeks–the cost to the economy will run into billions of shekels, with soaring unemployment and thousands of businesses closing permanently.

The bill for the shuttering of businesses across the country will be roughly 26.8 billion shekels, if it lasts no longer than three weeks, according to a study by Roby Nathanson, CEO of the Macro Center for Political Economics, reported Ynet on Thursday.

It threatens to add 7,500 businesses to the casualty list for this year, already at 75,000, due to the pandemic, according to the Times of Israel citing consultants CofaceBdi on Thursday.

“Businesses that will shut down because of the added lockdown, have reached the limit of their abilities and their financing options, and they cannot negotiate added closures,” the consultancy said in a statement.

A projected 100,000 workers or more will be thrown out of their jobs, and the government will have to pay billions in unemployment compensation.

The Finance Ministry and in the Prime Minister’s Office are working on a new financial assistance package for businesses, Ynet said.

Meanwhile, one of the country’s most high-profile businesses, the Hermon mountain ski resort, already sent its entire staff on unpaid leave as of Thursday, Kan reported. The only skiing option within Israel, the attraction hosts up to 12,000 people each day during the winter.

Hermon skiing attraction CEO Refael Nave said that the government hasn’t responded to the COVID-19 outlay meant to assure the site could operate this winter. This refusal “places a deep shadow of doubt over the site opening this year,” he said.