International Monetary Fund. Monetary and Capital Markets Department and International Monetary Fund. Strategy, Policy, & Review Department
This IMF report to the AHLC is the first since September 2018. Following limited engagement over the past three years, policy discussions have intensified in recent months. These discussions have focused mainly on establishing a medium term macro-fiscal framework, including the broad outlines of a reform scenario.
The Israeli economy has weathered the COVID-19 crisis exceptionally well, but risks are high. With substantial fiscal and monetary support, real GDP growth reached 8.1 percent in 2021, driven by consumption and high-tech exports. The rapid vaccination campaign boosted confidence. The outlook is positive but still subject to high uncertainty.
Mr. Pragyan Deb, Davide Furceri, Daniel Jimenez, Siddharth Kothari, Mr. Jonathan David Ostry, and Nour Tawk
This paper examines empirically the determinants of COVID-19 vaccine rollouts and their effects on health outcomes. We assemble a comprehensive and novel cross-country database at a daily frequency on vaccinations and various health outcomes (new COVID-19 cases, fatalities, intensive care unit (ICU) admissions) for the period December 16, 2020-June 20, 2021. Using this data, we find that: (i) early vaccine procurement, domestic production of vaccines, the severity of the pandemic, a country’s health infrastructure, and vaccine acceptance are significant determinants of the speed of vaccination rollouts; (ii) vaccine deployment significantly reduces new COVID-19 infections, Intensive Care Unit (ICU) admissions, and fatalities, and is more effective when coupled with stringent containment measures, or when a country is experiencing a large outbreak; and (iii) COVID-19 cases in neighboring countries can lead to an increase in a country’s domestic caseload, and hamper efforts in taming its own local outbreak.
The economic impact of the COVID-19 pandemic is unprecedented. Israel’s economic activity recorded a historic contraction, and the outlook remains challenging, with possible long-term scarring. Uncertainty is high, mainly driven by the evolution of the pandemic, the prospects for widespread vaccine distribution, and political uncertainty.