Israel’s government will struggle for fiscal austerity
Monday, July 5, 2021
Significance
Although the economy has rebounded, the exit from crisis mode will be complicated, not least because of a sudden increase in new COVID-19 cases in the second half of June.
Impacts
- Resurgent COVID-19 may force the government to reimpose some social distancing restrictions, weighing on economic activity.
- Segments of the country’s post-pandemic high unemployment could become chronic.
- Sharp deterioration in Israel’s debt-to-GDP ratio over 2020 will reduce fiscal space.
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