Panorama econòmic

Economic indicators

Syria has been plagued by a devastating war since 2011. According to a UN Development Programme report, the war-damaged economy of Syria will take decades to reach pre-conflict levels unless there is a significant acceleration in growth. The country's GDP has dropped to less than half of its 2011 value, and unemployment has tripled. However, the report suggests that with a sixfold increase in annual economic growth, Syria could recover within a decade. However; at current growth rates, Syria’s economy will not regain its pre-conflict GDP level before 2080. The conflict has severely weakened Syria's ability to absorb external economic shocks. In recent years, the economy has faced multiple challenges, including the spillover effects from the economic crises in neighbouring Lebanon and Turkey since late 2019, the COVID-19 pandemic and a subsequent cholera outbreak, the surge in global commodity prices following the war in Ukraine, the February 2023 earthquakes in Syria and Turkey, and more recently, the increased attacks and trade disruptions linked to the ongoing Middle East conflict since October 2023.

In December 2024, a coalition led by Hay'at Tahrir al-Sham (HTS) swiftly overthrew President Bashar al-Assad, ending over six decades of Ba'ath Party rule. Ahmed al-Sharaa, leader of HTS, was appointed President during the transitional period. The new government has initiated significant reforms, including forming a diverse cabinet with representatives from various religious and ethnic groups, such as Hind Kabawat, a Catholic woman appointed as Minister of Labour and Social Affairs. Efforts are underway to rebuild international relations and seek the removal of longstanding sanctions that have strained Syria's economy. Additionally, the government has engaged in negotiations with Kurdish forces to integrate Kurdish fighters into the Syrian army and grant constitutional rights to Kurds. However, challenges persist, including internal resistance from regime loyalists and regional tensions, such as border conflicts with neighbouring Lebanon. According to the World Bank's latest figures, real GDP is expected to decline by 1.5% in 2024 and 1% in 2025, following a 1.2% contraction in 2023.
 Syria's external debt is substantial relative to its ability to repay. The new government has stated that Syria owes between USD 20 billion and USD 23 billion, a significant burden compared to the country's GDP of USD 17.5 billion in 2023, according to the World Bank. Restructuring Syria's debt will be complex. The exact amount of external debt remains unclear, with reports suggesting it could be much higher than the government's estimate, possibly reaching USD 30 billion to USD 50 billion, including claims from Iran and Russia. The composition of creditors complicates restructuring; most debt is likely owed to official sources like Iran and Russia, with minimal commercial debt. Additionally, uncertainty around which entities (government, central bank, state-owned enterprises) hold the debt complicates the process, as different debts may require different treatment. Syria may also refuse to repay Assad-era debt.

On the humanitarian level, the situation is catastrophic. In line with the ongoing decline in per-capita GDP, extreme poverty is projected to rise to 33.1% in 2024 and 37.4% in 2025, pushing more than a third of the population into extreme poverty. The Syrian conflict has caused one of the largest displacement crises since World War II. By the end of 2023, over half of Syria’s pre-conflict population had been displaced, including 7.2 million internally displaced persons and 6.5 million refugees abroad. The already precarious situation of Syrian households has escalated, as reflected in heightened vulnerability. This rise in vulnerability has coincided with an uptick in labour force participation, particularly among workers on the fringes of the labour market, including women, youth, and the elderly, who face limited earning prospects. Meanwhile, government spending continued to be constrained by low revenues and the lack of access to financing. The current account of Syria is expected to remain firmly in deficit because of a high trade deficit, contributing to the drain of foreign exchange reserves.

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