Skip to main content

Coronavirus damages Iraqi economy with fall in tourism, oil prices

COVID-19 has harmed both the private and public sectors of the Iraqi economy.
A member of the medical team sprays disinfectant as a precaution against the coronavirus, following the outbreak of the virus, in a dental clinic in Sadr city district of Baghdad, Iraq, March 9, 2020. REUTERS/Thaier Al-Sudani - RC2CGF9V03HD

As of March 23, Iraq had registered 266 novel coronavirus cases, with 23 deaths. Although Iraq is much better off than many other countries, the fast-growing number of cases — 33 new infections and three more deaths in a 24-hour period — indicate that Iraq soon may face a very difficult situation. 

Also, measures the government has taken to fight the virus have damaged the economy; these steps have included imposing a curfew, closing roads between cities and canceling all religious tourism. This is not mention the oil price drop.

Many Iraqis, fearing that the country will suffer a more widespread outbreak, have started wearing face masks and have stayed home rather than go to their jobs in an effort to avoid catching COVID-19. However, a small number of people are not abiding by the government's curfew order, causing fears that the situation will worsen. 

Merchants have jacked up the price of face masks, taking advantage of the growing demand. The Ministry of Industry and Minerals quickly responded by manufacturing masks locally and selling them to citizens at reduced prices.

The government has taken many of its measures to prevent a greater outbreak across, Iraq knowing that the country’s health sector has an acute lack of infrastructure, equipment and medical staff and could be easily overwhelmed. 

Iraq already had been dealing with an economic crisis, partly due to the demonstrations that have been ongoing in many Iraqi provinces since October and accompanying political paralysis.

Many Iraqis rely on private businesses, be they small and medium enterprises, to earn a livelihood. But the virus or the fear of it is casting a dark shadow on such companies.

The fear of getting infected in crowded places such as cafes, restaurants and malls was depressing customer visits even before the government's March 7 order for the businesses to close. Some of the businesses, however, are still staying open.

In the usually tourist-crowded hotels in the cities of Karbala and Najaf where Shiite Muslims arrive to visit the Imam Ali Shrine and the Abbas and Hussein shrines, one only finds silent corridors.

Iraq closed down its religious shrines after it was confirmed that a student of religious sciences coming from Iran was infected with the virus in Najaf province. News photos have shown major sterilization operations at religious shrines.

Saeb Abu Ghneim, head of the association for hotels and restaurants in Najaf, said, “The hotels in Najaf have been going through a real financial crisis for months,” and added, “The crisis exacerbated with the fear of a coronavirus outbreak and [the government] banning Iranian tourists from entering into Iraq.” 

He said, “There are 350 hotels in Najaf, all closed because of the virus,” adding that even “Iraqis are no longer visiting the city of Najaf.”

Abu Ghneim said that shortly after the protests began, the number of hotels that continued to operate dropped to 30. He said, “Today, all of the hotels are closed out of fear of the spread of the coronavirus.”

Abu Ghneim said restaurants also have been badly hit, “as the people fear catching the virus from the utensils, such as the spoons and plates” and “are staying home.”

Iraq also is hurting in a major way because of its heavy reliance on income from its oil. Abdullah Kharbit, a member of the parliamentary economic and investment committee, told Al-Monitor, “The spread of coronavirus around the globe has left a direct impact on the Iraqi economy, as oil prices decreased.” 

Kharbit seemed more optimistic about some other areas of the economy. He said, “The goods arriving in Iraq are not affected at all. They are brought in through the border crossings after getting sterilized.” He was referring to goods coming from Iran, among other places.

He said that importers, “whose activity mainly depends on China, will not be affected,” and added that this sector “will more likely benefit from the stagnation of goods in China.”

“The internet is saving merchants from the need to travel to China. The payments are made online,” he said. 

Iraqi imports mostly come from China, Iran and Turkey. The list of imported goods is long, and includes furniture, clothing, food and milk.

But Abdul Razzaq al-Zuhairi, the head of the Federation of Chambers of Commerce, pointed at a slowdown in “sales and imports of goods from China and Iran.”

He told Al-Monitor, “The problem lies in the merchants’ inability to go to China and import goods,” as Iraq has halted travel to and from China and Iran.

Zuhairi said, “The continuation of troublesome conditions will more likely cause a monopoly of basic commodities and subsequent exploitation of the people.”

Authorities have repeatedly reassured Iraqis that the situation is under control, and the media have continued to refrain from reporting unconfirmed news about the virus in Iraq to prevent panic.

Join hundreds of Middle East professionals with Al-Monitor PRO.

Business and policy professionals use PRO to monitor the regional economy and improve their reports, memos and presentations. Try it for free and cancel anytime.

Already a Member? Sign in


The Middle East's Best Newsletters

Join over 50,000 readers who access our journalists dedicated newsletters, covering the top political, security, business and tech issues across the region each week.
Delivered straight to your inbox.


What's included:
Our Expertise

Free newsletters available:

  • The Takeaway & Week in Review
  • Middle East Minute (AM)
  • Daily Briefing (PM)
  • Business & Tech Briefing
  • Security Briefing
  • Gulf Briefing
  • Israel Briefing
  • Palestine Briefing
  • Turkey Briefing
  • Iraq Briefing

Premium Membership

Join the Middle East's most notable experts for premium memos, trend reports, live video Q&A, and intimate in-person events, each detailing exclusive insights on business and geopolitical trends shaping the region.

$25.00 / month
billed annually

Become Member Start with 1-week free trial
What's included:
Our Expertise

Memos - premium analytical writing: actionable insights on markets and geopolitics.

Live Video Q&A - Hear from our top journalists and regional experts.

Special Events - Intimate in-person events with business & political VIPs.

Trend Reports - Deep dive analysis on market updates.

We also offer team plans. Please send an email to and we'll onboard your team.

Already a Member? Sign in