Syria closed the 2025 fiscal year with a small budget surplus, a significant improvement compared with previous periods. This was achieved by concentrating public spending on meeting the population's basic needs, raising living standards, and increasing wages. Rationalization of expenditures and the Ministry of Finance’s decision to stop financing through the Central Bank played an important role. During its February visit to Damascus, the International Monetary Fund (IMF) agreed with Syrian authorities on a technical assistance program to implement large-scale fiscal reforms aimed at optimizing resources and improving public financial management.
Syria’s economy shows signs of recovery, driven by an acceleration of economic activity. This was influenced by improved consumer and investor sentiment, partial easing of international sanctions, and the gradual reintegration of the country into the regional and global economy. Progress in national reconciliation, the continued return of refugees, increased electricity supplies, favorable weather conditions, and new investment projects create promising prospects for growth in 2026 and beyond. The combination of these factors strengthened the IMF’s expectations about the potential for improved economic performance, provided reforms continue.
The draft state budget for 2026 envisages a substantial increase in spending on healthcare, education, wage increases, and the restoration of critically important infrastructure. The IMF judges the revenue forecasts to be ambitious but achievable, noting that the budget includes important contingency measures in case revenues and financing fall short of expectations. The Fund urges authorities to review spending priorities while protecting social budget items and continuing to strengthen the social protection system to support the most vulnerable groups.
In the area of monetary policy, the IMF notes that the Central Bank of Syria, despite existing constraints, has maintained a tight stance, which helped slow inflation and improve the exchange rate of the Syrian pound compared with 2024. The introduction of the new currency has begun successfully. Priorities in the near term should include strengthening the Central Bank’s ability to ensure price stability and financial stability, as well as enhancing its independence. It is also recommended to establish an appropriate framework for monetary policy, assess the resilience of banks, and carry out a restructuring of the banking system to restore public confidence.
The IMF’s technical assistance program is broad and covers reforms in public finances and budget management, including treasury management, revenue mobilization, tax policy, and revenue administration. It also provides support for public debt management, conducting debt sustainability analysis, collecting taxes on natural resource revenues, and implementing wide-ranging financial sector reforms. The IMF emphasizes that strong international support will remain necessary in the coming years to help alleviate the severity of poverty, including assistance for returning refugees and internally displaced persons.
News commentary
Which specific international sanctions on Syria were partially lifted and how did this affect particular economic sectors? - Sanctions imposed by Arab states were partly eased, in particular the resumption of trade across the border with Jordan and permission for deliveries of certain goods from the UAE and Saudi Arabia. This had a positive effect on the agriculture sector (export of fruits and vegetables), pharmaceuticals, and construction materials, where there has been an increase in shipments and investment from Arab countries.
What does the national reconciliation program in Syria entail and how is its progress linked to economic recovery? - It is a government program of local-level settlements offering amnesty to former militants and the restoration of government services in returning areas. Its progress allows economic activity to resume in areas previously outside government control, attracts domestic investment, and enables infrastructure restoration, contributing to overall economic recovery.
Through which main channels and with which countries is Syria’s economy being reintegrated regionally? - Main channels: resumption of air links with Arab countries (UAE, Egypt), opening of land crossings with Jordan and Lebanon, participation in regional exhibitions. Key partner countries: UAE (investments in energy and real estate), Jordan (goods transit), Saudi Arabia (humanitarian aid), Russia and Iran (energy and infrastructure projects).
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