The effect of the second lockdown is more moderate than that of the first lockdown
Demand is the main factor in the decline in economic activity
The Melnick State of the Israeli
Economy Index did
not change in November 2020. From the November and October indices data, we learn
that the impact of the second lockdown on economic activity was more moderate
than that of the first closure. The Industrial production index, which reflects
the supply side of the business sector, decreased in October 2020, the second lockdown
month, by 0.7%, compared to a decrease of 9.4% in March 2020, the first month
of the first lockdown. The revenue in commerce and services, which reflects
domestic demand and especially private consumption, decreased in October 2020,
by 0.5% compared to a decrease of 13.4% in March 2020. The level of the industrial
production index in October 2020 is like that of October 2019, however the revenue
in commerce and services was lower in October 2020 by 6.1%, compared to the
level in October 2019. The data indicate that the supply side of the business
sector is less affected, and demand is the main cause of the recession in the
economy.
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