Israel’s Central Banker Cautiously Optimistic on Economy’s Reopening

Israel’s central bank chief is optimistic the country’s economy will largely reopen in coming months as a result of a world-leading vaccine campaign.

About 30% of Israeli citizens have gotten the shot, and half have been given second doses, according to Health Ministry data. Prime Minister Benjamin Netanyahu has set a target of inoculating everyone older than 16 by the end of March.

That has “definitely given us a light at the end of the tunnel,” Bank of Israel Governor Amir Yaron said in a Bloomberg TV interview. “We’re certainly seeing ourself towards the second quarter almost opening the economy as much as one can.”

Israel’s Central Banker Cautiously Optimistic on Economy’s Reopening

The central bank’s researchers have forecast that under a rapid vaccination scenario, output could increase 6.3% this year, following an estimated 3.7% contraction in 2020. Yaron did caution that the spread of new coronavirus strains could slow progress. This week, the Health Ministry recommended another extension of Israel’s third lockdown, which began in late December, as morbidity and hospitalizations remain high.

“The mutations and the morbidity rates -- it takes longer to bring them down and so one cannot be completely complacent about it,” Yaron added.

Israel’s shekel gained 0.1% to 3.2637 to the dollar at 11:27 a.m. in Tel Aviv.

©2021 Bloomberg L.P.

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