As is the case elsewhere, the COVID-19 pandemic has taken a severe toll on the Jewish state’s economy, shrinking the GDP by 3.7 percent in 2020 and sending the unemployment rate up to 34.7 percent during the first lockdown. Still, the economic contraction is smaller than what the government experts had predicted last fall, vaccination is proceeding at steady rate, and the second lockdown (September-October of last year) took a less dire toll. The Jewish state is not, however, out of the clear by any measure: a third lockdown went into effect in December, and the ongoing political instability means that the country won’t have a 2021 budget until after the March election. Shlomo Even writes:

Now, with the third closure, there has been an increase in widespread unemployment. The most serious damage in this crisis is to employment in the tourism, trade, and leisure and entertainment industries and in small businesses, which suffer particularly due to lockdowns. During 2020, more than 70,000 small businesses were closed. Action must now be taken to prevent the closure of sound businesses just before the recovery phase.

Unemployment will remain high even after the pandemic subsides. According to the Bank of Israel’s forecast, [even] in a scenario of rapid vaccination, the broad unemployment rate will stand at 7.7 percent in the last quarter of 2021.

[E]conomic-social recovery depends first of all on the decline of the coronavirus. Given rapid vaccination, forecasts indicate GDP growth in 2021 at a rate of 4.5-6.3 percent. This is of course presumes there will be no exceptional events, such as the spread of a mutation that is immune to the vaccine. Israel will also be affected by growth in the world economy.

In the process of emerging from the crisis, reducing unemployment must be given first priority. . . . In [trying to do so], the government must seize opportunities to work for the long-term development of the labor market, with the aim of raising the employment rate and labor productivity, especially in the ultra-Orthodox and Arab sectors (which together make up about 32 percent of the population), and in the periphery. This effort, necessary for stable long-term growth, requires cultural and budgetary changes, and many years.

Surveying news websites and social media on Sunday morning, I immediately found some intelligent and well-informed observers arguing that Iran deliberately warned the U.S. of its pending assault on Israel, and calibrated it so that there would be few casualties and minimal destructiveness, thus hoping to avoid major retaliation. In other words, this massive barrage was a face-saving gesture by the ayatollahs. Others disagreed. Brian Carter and Frederick W. Kagan put the issue to rest:

The Iranian April 13 missile-drone attack on Israel was very likely intended to cause significant damage below the threshold that would trigger a massive Israeli response. The attack was designed to succeed, not to fail. The strike package was modeled on those the Russians have used repeatedly against Ukraine to great effect. The attack caused more limited damage than intended likely because the Iranians underestimated the tremendous advantages Israel has in defending against such strikes compared with Ukraine.

But that isn’t to say that Tehran achieved nothing:

The lessons that Iran will draw from this attack will allow it to build more successful strike packages in the future. The attack probably helped Iran identify the relative strengths and weaknesses of the Israeli air-defense system. Iran will likely also share the lessons it learned in this attack with Russia.

Iran’s ability to penetrate Israeli air defenses with even a small number of large ballistic missiles presents serious security concerns for Israel. The only Iranian missiles that got through hit an Israeli military base, limiting the damage, but a future strike in which several ballistic missiles penetrate Israeli air defenses and hit Tel Aviv or Haifa could cause significant civilian casualties and damage to civilian infrastructure, including ports and energy. . . . Israel and its partners should not emerge from this successful defense with any sense of complacency.