The unemployment rate climbed to one-quarter of the workforce on Sunday, the Israeli Employment Service said, with approximately 1.05 million applicants currently seeking unemployment benefits.
Prior to the crisis, the unemployment rate stood at a near record low of approximately 4%. Since the start of March, nearly 890,000 new requests have been submitted, with employees placed on unpaid leave making up 89% of all applicants.
The southern port city of Eilat is the hardest hit city nationwide, the Employment Service added, with the unemployment rate soaring from 3.3% at the end of February to 69.3% today. The city's economy is heavily supported by the tourism and hospitality industry. Beitar Illit (3.3% to 52.1%) and Nazareth (6.3% to 46.6%) were the next worst-affected locations.
Should all employees currently placed on unpaid leave return to their place of work at the end of the crisis, the unemployment rate would stand at 5.3%.
"Whether there will be a slow and measured return to routine or a faster one, it is necessary to adopt comprehensive policy tools to return as many Israelis to work, whether they were placed on unpaid leave or made redundant," said Employment Service director-general Rami Garor.
"For unemployed individuals who will have difficulty returning to the workforce, or groups with multiple barriers, significant efforts will be necessary to strengthen their skills and human capital."
In disappointing news for many cash-strapped households ahead of Passover, National Insurance Institute (Bituach Leumi) director-general Meir Spiegler told The Jerusalem Post's sister publication, Maariv, that unemployment benefit payments and grants of NIS 500 promised to families and the elderly will not be paid before the holiday.
In normal times, Spiegler said, the institute handles approximately 17,000 unemployment benefit requests per month. Since March 15, more than one million requests have been submitted.
"This month, we will pay NIS 700,000 to 800,000 in advance payments worth between NIS 1,000-2,000 for workers placed on unpaid leave," said Spiegler. "The systems aren't built for more than that."
Figures published by the Israel Tax Authority on Sunday morning provided welcome news, announcing that applications for grants from 80,000 self-employed workers have been approved to date as part of the government's financial aid plan announced last week.
A total of 72,000 applicants who submitted requests by midnight Saturday will receive payments on Monday or Tuesday, the authority said, prior to the Passover holiday. The average grant stands at NIS 4,143, and payments will amount to a total of NIS 300 million.
The government's NIS 80b. stimulus plan includes the payment of two grants to struggling self-employed workers: a first payment up to NIS 6,000 in April and a second payment up to NIS 8,000 in May.
To enable the fulfilment of commitments laid out in the government's plan and exceed the limits of its rolling monthly budget, ministers were scheduled to discuss late on Sunday an amendment to the basic law on the state economy.
Once agreed, the amendments will be brought to the Knesset for approval, where it will require the support of 61 members of Knesset.
Yesh Atid-Telem told the Post that it would support every "correct move" that the government advances to fight the coronavirus crisis, citing a plan that it published on Saturday to "rescue the Israeli economy."
In a briefing on Sunday, former Bank of Israel Governor Prof. Karnit Flug told reporters that a recession is "inevitable" but its depth and duration is still unknown.
While the extent of the recession will depend largely on the evolution of the disease, strong government measures to "flatten the curve" will also make "the recession curve deeper," said Flug, who currently serves as vice-president of research at the Israel Democracy Institute.
"When we look at the overall package announced by the Israeli government, the fiscal program is roughly in the same order of magnitude as packages announced by other countries," said Flug, who completed her five-year term at the head of the Bank of Israel in November 2018.
"In government-guaranteed credit, Israel is somewhat more modest than other countries. It is definitely a step in the right direction, but we need to see the details of eligibility for credit."
Despite fears concerning the extent of the growing fiscal deficit and national debt, Flug emphasized that the effect of not taking such measures would be "even more devastating" for the economy.
On Monday, the Bank of Israel's monetary committee will decide whether to cut its benchmark interest rate, possibly following similar measures taken by the US Federal Reserve, Bank of England and other central banks in recent weeks to limit the devastating economic impact of the coronavirus outbreak.
In a poll of 12 economists published by Reuters last week, six believed the committee would opt to cut the interest rate from 0.25% to 0.1%, while six forecast no change to the rate.
The committee has maintained the interest rate at 0.25% since November 2018, when the Bank of Israel surprised analysts by raising the rate from an all-time low of 0.1% after more than three-and-a-half years without change.