IMF sees Israeli economy shrinking 6.3% in 2020

Carmel Market Tel Aviv  / Photo:  Cadya Levy, Globes

The International Monetary Fund has issued a gloomier forecast for the Israeli economy than the Bank of Israel.

The International Monetary Fund (IMF) has issued a gloomier forecast for the Israeli economy than the Bank of Israel. The IMF sees Israel's economy contracting by 6.3% in 2020 due to the impact of the global coronavirus pandemic and not returning to its current level until 2022.

Earlier this month, the Bank of Israel Research Department published a forecast that predicted that the economy would contract by 5.3% in 2020 but that this would be more than compensated by 8.7% growth in 2021. The Bank of Israel's forecast is based on the economy returning to full operations by June.

The IMF's forecast not only sees a higher contraction of 6.3% this year but also a more modest rebound of only 5% growth in 2021. Regarding unemployment, the IMF sees Israel ending 2020 with 12% unemployment and ending 2021 with 7.6% unemployment. The IMF predicts negative inflation of 1.9% in 2020, compared with the Bank of Israel's forecast of -0.8%.

The IMF's Israel forecast is part of a particularly pessimistic forecast for all the world's developed economies. The IMF says that the coming recession will "dwarf the dimensions" of the 2008 financial crisis and will be the world's second largest ever depression after the Great Depression of the 1930s.

Published by Globes, Israel business news - www.globes-online.com - on April 16, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Carmel Market Tel Aviv  / Photo:  Cadya Levy, Globes
Carmel Market Tel Aviv / Photo: Cadya Levy, Globes
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