·In the months of January-February 2020, there was euphoria in the world's financial markets, which reached new records. This optimism was cut short suddenly, in late March 2020, with the appearance of a mysterious disease, which quickly became known as the COVID-19 epidemic.
·The epidemic spread quickly, affecting many countries worldwide, and leading the World Health Organization (WHO) to define it as a pandemic. The outbreak of the pandemic first led to a significant reduction in activity in many economies, then to the complete lockdown of certain geographical areas and sectors that ceased to operate. The lockdown was reflected in sharp declines and volatility of the capital markets, which in turn was reflected in peak levels of the Fear Index: the VIX.
·Following the recommendations of the health ministries and organizations, governments imposed environmental restrictions that led to a sharp contraction in the activities of the economic sectors. The most prominent industries affected were trade and services, tourism, recreation and leisure, aviation, and the energy industry.
The number of unemployed in Israel crossed the one million mark.
The uncertainty that prevails in the entire economy has affected the income-producing real estate industry. Therefore, we will review the key sectors in light of the latest developments and against the background of uncertainty that prevails in the economy as a whole.
To cope with the drastic decline in economic activity, alongside the collapse of the capital markets, many governments were forced to increase fiscal spending. The Israeli government formulated a plan consisting of various measures to reduce the damage caused by the epidemic. The objectives of the economic program were to support the households and to create the conditions for the future recovery of the business sector.
The economic slowdown continued for a longer period than initially anticipated. However, in the fourth quarter it was possible to begin to see the light at the end of the tunnel, after the vaccines were approved. Thus, the expectation is for economic recovery is the middle of 2021.