Syria’s economy across all sectors was devasted by years of civil war between 2011 and 2024 [Getty/file photo]

Syria’s economy is expected to record growth exceeding 10% in 2026, the IMF said in a new report on Tuesday, as the country continues to rebuild its economy following the ouster of the Assad regime one and a half years ago.

This expansion has been driven by several factors, notably the recovery of the agricultural sector, increased oil and gas production, and improved electricity supplies, the IMF said, with the addition of the expansion of trade and services, the continued return of Syrians living abroad, and an increase in visitor numbers.

The projection follows a visit to Damascus from 19-23 July by a team of IMF experts led by Ron van Rooden, who assured that Syria’s economic recovery was “accelerating”. The visit aimed to discuss progress on economic reforms and policy priorities, and to agree on new areas for technical assistance to strengthen cooperation with Syrian authorities.

In a statement, the fund explained that the Syrian economy began to regain momentum in 2025, after more than a decade of civil war devastated the country. Former president Bashar al-Assad was ousted in December 2024.

This recovery was supported by improved consumer and investor confidence following political change, the return of approximately 1.5 million refugees, and Syria’s gradual reintegration into regional and global economies —despite the adverse effects of drought on the agricultural sector.

However, the report highlighted persistent disparities in the pace of recovery across different regions and highlighted that poverty rates remain widespread, even though they have declined somewhat compared to the previous period.

Conversely, the IMF noted that inflation rose in 2026 due to higher import prices —particularly for fuel and food —driven by regional conflict, alongside improved domestic demand, public sector wage hikes, and increased costs for certain public services and housing. It projected a decline in inflation during 2027, contingent upon the continuation of sensible fiscal and monetary policies and a reduction in pressures on import prices.

The report also highlighted an improvement in public finance performance, noting that the 2025 budget recorded a modest surplus. It projected a rise in government revenues for 2026, supported by increased tax and customs receipts, hydrocarbon sector earnings, and certain one-off revenues; this would facilitate the implementation of most budget items, although pressures on capital expenditure might persist due to resource constraints.

The Syrian civil war, beginning in 2011, had long-lasting impacts on the country’s GDP,  industries and infrastructure, led to the collapse of oil production and high rates of unemployment, and plunged the value of its currency. Since Ahmed al-Sharaa assumed his role as president in early 2025, he has sought to revive the economy by rebuilding relations with international powers, attracting investment, and encouraging Syrians living abroad to return home.

The IMF emphasised the need to continue fiscal reforms, strengthen public financial management, broaden the tax base, and reduce tax exemptions, which would generate additional resources for development spending and social safety nets.

Regarding the financial sector, the IMF identified the accelerated rehabilitation of the banking sector as a priority; it called for the enactment of new laws governing the central bank and commercial banks, the strengthening of banking supervision, and the development of frameworks to combat money laundering and the financing of terrorism— measures that would support Syria’s reintegration into the international financial system and enhance prospects for attracting investment from abroad.

The IMF reaffirmed its commitment to providing technical support to the Syrian government in the coming period through a programme covering public finance reform, the development of tax and customs administration, public debt management, banking sector reform, and the improvement of economic statistics —all in preparation for resuming Article IV consultations with Syria at the authorities’ request.

It also noted that the continued recovery of the Syrian economy requires maintaining sound fiscal and monetary policies, alongside the provision of rapid international support to meet humanitarian and development needs, facilitate the reintegration of refugees and returnees, and rehabilitate infrastructure and essential services.