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Shackled: Syria’s uprising exacts heavy toll across Economy
Businessmen and analysts say the Syrian economy is shrinking; the IMF forecast a 2 percent contraction for Syria in 2011, in contrast to 3 percent growth which it predicted earlier this year
October 14, 2011 2:00 by Reuters
“I wish we could see foreigners, but the only people in the old city are Iranians. These are now the only visitors, along with weekend shoppers from Lebanon who are supporting the markets,” the owner, who requested anonymity because of the sensitivity of the issue, said by telephone.
The economy has also been hit by international sanctions designed to pressure Assad, including a ban on Syrian oil sales to the European Union. The country has been earning some $2.5 billion a year from oil exports but must now look for customers further afield, who may pay less than Europe.
Last month Syrian Finance Minister Mohammad al-Jleilati played down the impact of the sanctions on government revenues, predicting the economy would grow 1 percent this year. Syria is cushioned by foreign reserves that were estimated at around $16-18 billion before the crisis — a sizeable amount for an economy of its size — and low government indebtness, estimated at just $6 billion by private economists.
But businessmen and analysts say the economy is shrinking; the International Monetary Fund last month forecast a 2 percent contraction for Syria in 2011, in contrast to 3 percent growth which it predicted earlier this year. Some private economists think the recession could be worse.
“The impact of the unrest is very negative and in many sectors it’s hard to quantify, but there is a recession almost across the board, from tourism to real estate to investment,” said Nabil Sukkar, a former economist with the World Bank who runs an economic think tank in Damascus.
October 14, 2011 | Analysis