Syria’s Economic Recovery Gains Momentum: IMF Signals Positive Trend
Damascus – Recent assessments by the International Monetary Fund (IMF) indicate a strengthening economic recovery in Syria, fueled by improving investor confidence, the return of refugees and a shift towards more stable financial policies. A staff team, led by Ron van Rooden, concluded a visit to Damascus on February 19, 2026, to evaluate progress and discuss future priorities.
Budget Surplus and Fiscal Prudence
Preliminary data reveals a modest budget surplus for the Syrian central government in 2025. This achievement is attributed to careful spending controls and, crucially, the absence of direct central bank financing of the budget – a significant departure from past practices. The 2026 budget prioritizes increased investment in healthcare, education, and infrastructure rehabilitation, while maintaining a focus on social safety nets for vulnerable populations.
The Ministry of Finance is also focused on improving the efficiency and transparency of public spending, with plans for digitalization of government services. A key emphasis is on rigorous assessment of private sector investment projects to manage potential financial liabilities.
Inflation Slowdown and Monetary Policy
Syria has experienced a notable slowdown in inflation, falling to the low double digits by the end of 2025. This is coupled with an appreciation of the exchange rate compared to 2024. The successful introduction of a latest currency has contributed to this stability. The IMF is now focusing on empowering the Central Bank of Syria to ensure price and financial stability, and to develop an appropriate monetary policy framework.
Rebuilding public trust in the banking system is a priority, requiring a thorough assessment of banks’ financial health and a restructuring of the banking sector. This is essential for the system to effectively facilitate domestic and international payments and implement monetary policy.
IMF Technical Assistance Program
The IMF has agreed to an extensive technical assistance program for Syria, focusing on key areas of economic reform. This includes capacity building in public financial management, revenue mobilization, public debt management, and natural resource taxation. Support will also be provided for financial sector reforms, including new legislation, rehabilitation of payment systems, and strengthening banking supervision.
Improving statistical data collection – covering national accounts, price indices, and balance of payments – is also a key component of the program. This will facilitate better policy design and assessment, and pave the way for future IMF consultations with Syria.
International Support Remains Crucial
While Syria is showing positive economic signs, the IMF emphasizes that substantial international support remains vital. This support is needed to alleviate poverty, particularly among returning refugees and internally displaced people. The country’s ability to access external financing will also depend on progress in addressing its legacy debts.
Did you know?
The return of over one million refugees is contributing to the positive economic trends in Syria, according to the IMF.
FAQ
Q: What is the IMF’s role in Syria’s economic recovery?
A: The IMF is providing technical assistance and support for economic reforms, focusing on fiscal management, financial sector development, and data collection.
Q: What are the key challenges facing Syria’s economy?
A: Addressing legacy debts, attracting international support, and rebuilding essential infrastructure remain significant challenges.
Q: What is the current inflation rate in Syria?
A: Inflation has slowed to the low double digits by the end of 2025.
Q: What is the outlook for economic growth in Syria?
A: The outlook is positive, with activity increasing at an accelerating pace, but sustained growth depends on continued reforms and international support.
Pro Tip: Keep an eye on developments in Syria’s debt restructuring efforts, as this will be a key factor in attracting further international investment.
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