Rouhani: Iran cannot shut down economy despite worsening coronavirus outbreak

Iran has suffered a sharp economic downturn after US President Donald Trump withdrew from a landmark nuclear agreement in 2018 and reimposed crippling sanctions. (WANA via Reuters)
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Updated 11 July 2020

Rouhani: Iran cannot shut down economy despite worsening coronavirus outbreak

  • Iran must continue ‘economic, social and cultural activities while observing health protocols’
  • The International Monetary Fund predicts Iran’s economy will shrink by six percent this year

TEHRAN: Iran said on Saturday that it cannot afford to shut down its sanctions-hit economy, even as the Middle East’s deadliest coronavirus outbreak worsens with record-high death tolls and rising infections.
Iran must continue “economic, social and cultural activities while observing health protocols,” President Hassan Rouhani said during a televised virus taskforce meeting.
“The simplest solution is to close down all activities, (but) the next day, people would come out to protest the (resulting) chaos, hunger, hardship and pressure,” he added.

However, he called for big gatherings such as weddings and wakes to be banned to stem a rise in coronavirus infections.
Shortly after Rouhani’s televised speech, a police official in Tehran announced the closure of all wedding and mourning venues in the capital until further notice.
The Islamic republic has been struggling since late February to contain the country’s COVID-19 outbreak, which has killed over 12,400 people and infected more than 252,000.
Deaths from the respiratory disease hit 221 on Thursday — a single-day record for Iran.
The country closed schools, canceled public events and banned movement between its 31 provinces in March, but Rouhani’s government progressively lifted restrictions from April to reopen its sanctions-hit economy.
The outbreak’s rising toll has prompted authorities to make wearing masks mandatory in enclosed public spaces and to allow the hardest hit provinces to reimpose restrictive measures.
Iran has suffered a sharp economic downturn after US President Donald Trump withdrew from a landmark nuclear agreement in 2018 and reimposed crippling sanctions.
The International Monetary Fund predicts Iran’s economy will shrink by six percent this year.
“It is not possible to keep businesses and economic activities shut down in the long-term,” Rouhani said, emphasizing that “the people will not accept this.”
Health Minister Said Namaki warned on Wednesday of a potential “revolt over poverty” and blamed US sanctions for the government’s “empty coffers.”
The reopening of the economy “was not over our ignorance (of the virus’ dangers), but it was due to us being on our knees against an economy that could take no more,” Namaki said on state television.
US sanctions targeted vital oil sales and banking relations, among other sectors, forcing Iran to rely on non-oil exports, which have dropped as borders were closed to stem the spread of the virus.


US job growth slows sharply in July

Updated 07 August 2020

US job growth slows sharply in July

  • Nonfarm payrolls increased by 1.763 million jobs last month after a record 4.791 million in June
  • The US economy suffered its biggest blow since the Great Depression in the second quarter

WASHINGTON: US employment growth slowed considerably in July amid a resurgence in new COVID-19 infections, offering the clearest evidence yet that the economy’s recovery from the recession caused by the pandemic was faltering.
Nonfarm payrolls increased by 1.763 million jobs last month after a record 4.791 million in June, the Labor Department said on Friday. Economists polled by Reuters had forecast 1.6 million jobs were added in July.
The unemployment rate fell to 10.2 percent from 11.1 percent in June, but it has been biased downward by people misclassifying themselves as being “employed but absent from work.” At least 31.3 million people were receiving unemployment checks in mid-July.
“The steam has gone out of the engine and the economy is beginning to slow,” said Sung Won Sohn, a finance and economics professor at Loyola Marymount University in Los Angeles. “The loss of momentum will continue and my concern is that the combination of the virus resurgence and lack of action by Congress could really push employment into negative territory.”
The labor market step-back is more bad news for President Donald Trump, who is lagging in opinion polls behind former Vice President Joe Biden, the presumptive Democratic Party nominee for the Nov. 3 election.
It also piles up pressure on the White House and Congress to speed up negotiations on a second aid package, which have been dragging over differences on major issues including the size of a government benefit for tens of millions of unemployed workers.
A $600 weekly unemployment benefit supplement expired last Friday, while thousands of businesses have burned through loans offered by the government to help with wages.
The economy, which entered into recession in February, suffered its biggest blow since the Great Depression in the second quarter, with gross domestic product dropping at its steepest pace in at least 73 years.
Infections of the respiratory illness soared across the country last month, forcing authorities in some of the worst affected areas in the West and South to either shut down businesses again or pause reopenings, sending workers back home. Demand for goods and services has suffered.
The slowdown in hiring challenges the US stock market’s expectation of a V-shaped recovery. The S&P 500 index is up nearly 50 percent from its March trough. As COVID-19 cases spiral, and Republicans and Democrats bicker over another stimulus package, economists see a W-shaped recovery.
Economists estimate the Paycheck Protection Program that gave businesses loans that can be partially forgiven if used for employee pay saved around 1.3 million jobs at its peak. The extra $600 weekly unemployment checks made up 20 percent of personal income and helped to boost consumer spending in May and June.