Israel to release Q2 GDP growth estimate
Israel’s Central Bureau of Statistics is scheduled to release its second quarter GDP growth rate today, which is expected to show a 1.7% contraction.
Israel’s GDP has been on the downswing since the start of the COVID-19 pandemic, shrinking by 1.8% in the first quarter. Easing of social distancing requirements and fiscal stimulus in June allowed the economy to begin to recover, however stricter guidelines re-imposed in July has arrested this progress. With today’s data, a total contraction for 2020 of 5.9% is expected. While Israel’s parliament recently approved a relief package to aid struggling businesses and unemployed workers, the government faces criticism for failing to clearly specify who will receive aid.
The long-term economic picture for Israel is slowly worsening as the pandemic continues to hurt the economy. Expect small businesses to continue struggling and unemployment to increase as the government has difficulty providing necessary aid. Prime Minister Benjamin Netanyahu’s position as head of government is shaking as citizens express frustration at his response to the pandemic, and a poor second quarter performance will provide more fuel for his opponents. Expect another stimulus bill by the end of the year as Netanyahu’s government seeks to improve its public standing and prevent further economic collapse.
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