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Economists In Iran Warn President Of Possible Unrest Amid Coronavirus Damage

Tajrish Bazaar in Tehran appears deserted amid fear of the coronavirus disease (COVID-19), April 2, 2020
Tajrish Bazaar in Tehran appears deserted amid fear of the coronavirus disease (COVID-19), April 2, 2020

Fifty Iranian economists have warned President Hassan Rouhani that the consequences of the coronavirus epidemic can lead to unrest in low-income areas around big cities later this year.

In a letter addressed to Rouhani on April 3, the economists forecast a worsening recession, decline in production and economic growth, rise in poverty, budget deficits and a worsening inflation.

They have warned that unrest can happen later in 2020 or in early 2021. Iran was repeatedly rocked by widespread protests since its economy began to falter in 2017. In the latest round of unrest last November hundreds were killed by security forces and thousands jailed.

The economists have proposed several steps to Rouhani to cushion the economy from a hard fall. The first measure would be to offer each citizen a 10 million rial loan for purchasing goods. This would amount to $62.5 based on the free-market exchange rate, which really determines retail prices.

In addition, the proposed plan suggests offering compensation and loans to small businesses and deferring tax collection.

They have also suggested extending social assistance to lower-income groups, as Iranian Red Crescent has warned two million daily laborers have lost their jobs.

President Rouhani on April 2 said Iran has enough foreign currency to take care of the country’s essential needs until the end of the current Iranian calendar year in March 2021.

However, the oil dependent country has lost all its crude exports due to U.S. sanctions, which could have brought more than $40 billion into its economy. Other exports have also declined, and Iran is forced to draw on its reserve fund.