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The delta variant outbreak in Israel is a risk to the economy, but the governor of the country’s central bank expects the recovery to continue for now.
Amir Yaron of the Bank of Israel said authorities were monitoring whether new cases of the delta strain, first detected in India, resulted in serious illness and hospitalizations.
“I hope it doesn’t, in which case our basic approach is that we will always see each other come out well,” he said, referring to the country emerging from the economic crisis.
“In 2021 and by the end of 2022, we’re going to be fundamentally very close to where we were supposed to be before the pandemic,” he told CNBC’s Hadley Gamble on Monday.
With the interest rate where it is and being accommodating, it must allow the economy to continue to emerge from the pandemic in this particularly rapid manner.
Amir Yaron
Governor of the Bank of Israel
Delta risk
Israel reported 496 cases of Covid on July 5, an 88.1% increase from a week ago, according to Our World in Data.
After a rapid rollout of the vaccine, the country initially lifted restrictions and rushed towards a return to normal after the pandemic. But authorities have since reintroduced some coronavirus measures after the delta variant began to spread in the community.
Israel has fully vaccinated 59.8% of its population, while 65.2% have received at least one dose of a Covid vaccine, according to Our World in Data.
Ultimately, the most important factor is whether you are putting pressure on hospital and medical support in a way that cannot handle the numbers. Right now, it doesn’t look like it.
Amir Yaron
Governor of the Bank of Israel
Israel’s national budget
Yaron told CNBC that Israel must adopt its national budget and the country must invest for the future.
“We absolutely need this state budget,” he said. “This is the work plan for the long-term economy … we need to do what many other countries have to do, which is to invest in infrastructure, to invest in education as the economies are growing, especially high-tech (sectors). “
The country will also need to invest in human capital, he added.
Israelis wear protective masks at a shopping mall in Jerusalem on June 25, 2021.
EMMANUEL Dunand | AFP | Getty Images
Israel aims to approve its first national budget since March 2018 in November this year, after parliament approved a new coalition government last month.
The governor of the central bank said Israel needs to grow its economy over the next decade in order to grow and make the right investments.
“The challenge will be to integrate them, in a very fiscally responsible way, so that… the debt / GDP ratio remains stable over the next few years,” he said.
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