The World Bank published on June 9 its first comprehensive report in several years on the state of the Syrian economy. It foresees a worsening of the economic situation in Syria
In particular, the report indicates that real GDP will fall by 2.60% in 2022 after contracting by 2.10% in 2021. The erosion of purchasing power is expected to continue amid rising prices and depreciation currency. Private investment remains at low levels, while public spending remains constrained by low government revenue and lack of access to finance. The report forecasts that the budget deficit will increase from 6.80% in 2021 to 7.70% of GDP in 2022.
Syria’s current account is expected to remain in deficit due to an extremely high trade deficit which will only be partially offset by net current transfer inflows. The current account deficit is expected to decline from around 4% of GDP in 2021 to 5% of GDP in 2022.
Persistent fiscal and current account deficits are expected to further deplete foreign exchange reserves, driving the continued depreciation of the Syrian pound.
Two major sources of uncertainty in Syria are highlighted by the report: the COVID-19 pandemic (the slow deployment of vaccination and the insufficiency of health facilities make this country very vulnerable to variants) and the war in Ukraine ( due to its heavy dependence on food and fuel imports, Syria is particularly vulnerable to shocks in commodity markets).
Source: French Embassy in Lebanon