Coronavirus attacks five key economic points in Iran

The discussion of the coronavirus entering Iran may have reached the level of official media in the past few days, but many had been whispering about the disease entering the country for weeks.

This note aims to examine the brief economic effects of this disease on five points of the economy.

Sectors and industries of the Iranian economy that are exposed to public use are the first point of impact and are classified as follows.

Restaurant and self-service restaurant owners' guild

The latest market situation for this sector in the Iranian economy indicates a volume of 24 trillion tomans for this sector in the Iranian economy.

Given the cultural situation of Iranian society, which is based on using the services of this profession both indoors and outdoors as a form of entertainment, the seriousness of the harm to this profession can be considered more general.

Coffeehouses and hookah lounges

The tobacco product offering sector can be divided into three categories:

First, traditional and old coffee houses that have existed since before the revolution and are often located in working-class areas; second, hookah bars that have been established in recent years and whose scope of activity is solely to offer hookah and are a place for young people to gather; and third, places with other uses, such as restaurants and coffee shops, that offer hookah in order to earn more money.

Although there are no official statistics on the number of businesses that provide this service, in Tehran alone there are more than three thousand coffee houses with 35 thousand employees working in this industry, and the number of unauthorized and unlicensed coffee houses is several dozen times this number in the entire country.

The daily expenditure on cigarettes and hookahs in Iran is more than 30 billion and more than 10 trillion tomans per year. If we allocate five percent of this number to people's use of hookahs in public places, we can imagine clearer dimensions of the decrease in people's use due to this disease.

Domestic and intracity trips

The average family trip in the country is 119 trips, and about 250 million intercity trips are made in the country annually. 55% of Iranian families travel annually, and these figures are for recreational trips by families in Iran.

But these numbers do not reflect the entire reality, and Tehran alone experiences 6.5 million daily trips and transfers from its satellite towns and suburbs that benefit from public transportation services.

Of the 20 million daily trips in Tehran, 12 million are made by public transportation.

Now, if we consider the numbers of daily urban trips using public transportation services across the country, we can imagine the magnitude of the reduction in these trips and its effects on the economy of the sector and the economy of the country as a whole.

Foreign trips

Out of every 100 foreign trips made by Iranians, about 85 are to neighboring countries and the region, and six are to Thailand.

According to statistics announced recently, approximately 4.26 million people from Iran traveled abroad in the first six months of 2019. During this period, the number of Iranian travelers traveling abroad increased by nearly 16 percent compared to the same period last year.

In another comparison of the total number of outbound tourists in 2018, more than two million 870 thousand people went to Iraq.

After Iraq, the most popular countries for Iranians to travel abroad are Turkey, the United Arab Emirates, Azerbaijan, Georgia, Germany, Qatar, Armenia, Saudi Arabia, and China, respectively. Given the restrictions and bans recently announced on the entry of Iranian nationals and flights, the extent of the damage can be calculated.

Also, in the first quarter of 2019, we witnessed the arrival of more than three million foreign tourists to the country, which is a 40 percent increase compared to the same period last year, and this sector will definitely experience similar losses.

Cinema and theater

There are 596 active cinemas and 1,292 theaters in the country, which are used by nearly 28.5 million people per year. Now, with the spread of negative news about the coronavirus outbreak, the cinema and theater industries will also suffer losses.

Conclusion

The spread of the coronavirus in Iran will undoubtedly affect other parts of the Iranian economy, such as foreign trade, health and related services, banking services, and the goods distribution system, but reducing the severity of this damage directly depends on the government's plans to control the spread of the coronavirus.

Because if the government's plans to control the coronavirus are not taken seriously, people will resort to austerity measures in the economy, and other countries will also use stricter rules in all their dealings with Iran.

Source: Radio Farda