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|GDP (current US$)||$40.41 billion||2014|
|Population, total||22.16 million||2014|
Sectors under coverage
Oil and Gas
The proliferation of the violent conflict in Syria over the past four years has taken a heavy toll on the lives of the Syrian people and has created an unprecedented crisis of refugees and internally displaced people. The estimated death toll has exceeded 220,000 people (UN). In 2014, half the Syrian population had been forced to leave their homes including 7.6 million internally displaced persons. As of September, 2015, 4 million Syrians have registered as refugees with the UNHCR, and are mostly hosted in Syria’s neighboring countries, Iraq, Jordan, Lebanon, Turkey, but also in Egypt and, increasingly, in European countries.
More than 12.2 million people in Syria are in need of humanitarian aid, including 5.6 million children (UNOCHA, Syrian Center for Policy Research-SCPR). Lack of access to health care and scarcity of medicine have led to a catastrophic health situation. Poor food availability and quality and successive cuts in subsidies on bread have exacerbated nutritional deprivation. An estimated 25 percent of schools were not operational by 2014.
The conflict has significantly damaged public and private assets including health, education, energy, water and sanitation, agriculture, transportation, housing and infrastructure. The World Bank Damage and Needs Assessment report of July 2015 (conducted for six governorate capitals namely Aleppo; Dar’a; Hama; Homs; Idlib; and Latakia) estimated the total damages for the six cities to be between $ 3.7 to 4.5 billion. Aleppo is the most affected city accounting for roughly 40 percent of the estimated damages. Latakia is the least affected city; however, the conflict’s impact on the city is manifested in the increased pressure on infrastructure and services from the population increase from Internal Displaced Persons (IDPs).
The economic impact of the conflict is difficult to estimate precisely given limited data but is large and growing. Syria’s GDP is estimated to have contracted by an average of 15.4 percent for the period (2011-14) and is expected to decline further by nearly 16 percent in 2015. The decline in GDP growth was in part attributed to a sharp decline in oil production, down from 368,000 barrels per day in 2010 to an estimated 40,000 barrels per day in 2015. After increasing by nearly 90 percent in 2013, average inflation increased by 29 percent in 2014. CPI inflation is estimated to increase by 30 percent in 2015 because of continued trade disruption, shortages and a sharp depreciation of the Syrian pound.
Public finances have materially worsened since the start of the conflict. The overall fiscal deficit increased sharply, by an average of 14 percent of GDP during the period 2011-14, and is estimated to reach 22 percent of GDP in 2015. Underlying fiscal developments were, however, much more adverse than suggested by changes in the deficit. Total revenue fell to an all-time low of below 6 percent of GDP in 2014 and 2015 due to the collapse of oil revenues and tax revenues. In response, government spending was cut back, but not by enough to offset the fall in revenues. Reduction in outlays on wages and salaries were not high enough, while military spending increased.
The severe decline in oil receipts since the second half of 2012 and disruptions of trade due to the conflict put pressure on the balance of payments and exchange rate. Revenues from oil exports decreased from $4.7 billion in 2011 to an estimated $0.22 billion in 2014, and are estimated to decline further to $0.14 billion in 2015. Therefore, the current account balance is estimated to continue its trend and reach a deficit of 13 percent of GDP in 2015. As a result of the civil war, total international reserves have declined from $20 billion at end-2010 to an estimated $2.6 billion at end-2014, and are estimated to fall further to $0.7 billion by the end of 2015. Depressed export revenue caused by the impact of the conflict and declining international reserves have caused a significant depreciation of the Syrian pound from 47 pounds per USD in 2010 to an estimated 177 pounds per USD at end-2014 and have depreciated further to 305 pounds per USD at end-August 2015.
Once the situation stabilizes, Syria will have to grapple with immediate economic challenges. It will also need to support the return of internally displaced people and refugees in neighboring countries, rebuild the country’s infrastructure, enhance the provision of public services including health and education, and rebuild the social fabric of the country.
Source: World Bank
Updated: September 2015