Iran’s Parliamentary Research Center Warns About Coronavirus Impact: Lower Economic Growth and Higher Inflation
Iran’s Parliamentary Research Center has issued warnings in its reports about the impact of coronavirus on Iran’s economy, expressing concern about the possibility of creating a “crisis” in the supply chain of essential goods for the public, further depletion of foreign exchange resources, unemployment, higher inflation, and financial burden imposed on retirement funds.
In one of its reports, the center, referring to unfavorable economic indicators in Iran including negative economic growth, budget deficit, and 25 percent inflation, stated that “the costs imposed as a result of the coronavirus epidemic and the resulting decline in production can expose the economy to higher inflation and lower economic growth.”
The report warned that disruption in the supply chain of essential goods for people’s livelihood could “turn unfavorable economic conditions into a crisis.”
The report also referred to the decline in oil prices as another effect of coronavirus.
The spread of coronavirus worldwide has severely reduced oil consumption, and according to Kpler statistics, more than 4.5 billion barrels of oil are currently stored in global crude oil reserve facilities, showing an increase of 91 million barrels compared to February.
Brent oil price, which was around $70 at the beginning of the current year, fell to around $25 on Wednesday following the spread of coronavirus and the failure of OPEC and allied countries led by Russia to further reduce oil production.
Also, according to Reuters news agency, Iran’s daily oil production in March declined by another 70,000 barrels due to the “spread of coronavirus.”
Iran’s Parliamentary Research Center also reported that due to the spread of coronavirus in Iran and the sense of danger among neighboring countries, particularly Iraq, Afghanistan, and Turkey, and their restriction of Iranian exports to their countries, “creating foreign exchange resources through non-oil export channels for the country may face problems.”
Even before the spread of coronavirus, Iran’s exports had declined due to sanctions, and for example, according to the European Commission report, exports from 28 EU member states to Iran in 2019 decreased by half compared to the previous year, but their imports from Iran showed a 14-fold decline.
Iran’s Parliamentary Research Center reported in another report that in the event of 4,000 deaths and 200,000 people becoming unemployed, retirement funds would bear a cost of 1,855 billion tomans.
According to the latest research by the International Labour Organization, it is estimated that the income of employed people in various countries will decrease by a total of $344 billion.
Based on an optimistic scenario, the gross national product of countries will decline by nearly two percent, and a total of 5.3 million people will become unemployed.
Source: Voice of America
