Iran has struggled with one of the worst outbreaks of covid-19. Despite this, its stockmarket is booming
to be no end to Iran’s suffering. It has struggled with one of the world’s worst outbreaks of covid-19. As it opens back up there are signs that it is being hit by a powerful second wave. Last year the economy shrank by almost 8%. It may do worse this year. American sanctions had largely cut if off from the global market. The coronavirus has just about finished the job.
The main reason it is booming is that Iranians have few other places to put their cash. With inflation above 30% and the value of the Iranian rial dropping, there is little incentive to open a savings account at home. The government makes it hard to buy foreign currencies; American sanctions put stockmarkets abroad out of reach. Some Iranians buy land or cars, but prices are too high for most.
Iran’s leaders encourage the activity, anxious to sustain hope in an otherwise dire situation. They also see an opportunity to raise state revenues hit hard by sanctions. The government recently listed an exchange-traded fund with government stakes in banks and financial institutions and may soon do the same with its mining, steel and petrochemical holdings.
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