Iran has unveiled a package of state-backed loans to support poorer people and boost consumer spending as the government prepares to ease some of the work restrictions it imposed to contain coronavirus. President Hassan Rouhani said the measures would include guaranteeing bank credit of 10m rials ($61) to 23m families – most of the  population –  and low­ interest rate loans up to 20m rials to lower-income  households.

The package was launched a day after Mr Rouhani ordered a step-by-step reopening of businesses that it considers to be low or average risk in terms of spreading the virus. This will initially apply to all provinces outside Tehran from April 11.  The same restrictions will be lifted in the capital a week later. “To stay home remains a principle, but we are in such a situation that we cannot say businesses should not work at all for a long time,” Mr Rouhani said. “We cannot put aside social distancing, but should make it smart … If hygienic issues are not observed, we might fall into difficult conditions again.”

Many businesses took this as a green light to start returning to normal life, with Tehran’s roads and metro stations packed on  Monday. Iran has been one of the countries hit hardest by the pandemic, recording about 65,500 confirmed cases and  more than 3,700  deaths.

But the government has been reluctant to impose a full lockdown because of concerns about the impact on the economy, which was already devastated by crippling US sanctions . The republic’s economy contracted by 9.5 per cent last year, according to the IMF, as the sanctions caused Iran’s oil exports to fall from 2.8m barrels a day in May 2018 to a few hundred thousand and severed its links to the global financial system.

The coronavirus outbreak is expected to fuel a further fall in output and increase joblessness in a country struggling with a 17.8 per cent youth unemployment rate.