Economy

By the middle of last year, inflation had already reached 55 percent, according to a new consumer price index issued by an independent Syrian organisation. Meanwhile, the government has lifted one of the last tools it used to keep a lid on prices, risking further price increases.

The Autonomous Administration of North and East Syria has issued several statements and briefs about its plans for 2023 and its performance in 2022, indicating a notable shift towards prioritising the water, agriculture, and health sectors.

A French auction house held last week the sale of home furnishings reportedly belonging to Rifaat Al-Assad, the former Syrian vice-president accused of war crimes and corruption. In 2020, a French court ordered the confiscation of properties belonging to Mr Assad but the furniture was not included.

The wealth held by Syrians has decreased by 36 percent since the economic crisis intensified in 2019, according to a recent report.

Higher electricity prices in Syria’s northern areas are starting to have an impact, leading to renewed protests.

On January 9, the United Nations Security Council unanimously adopted a resolution to authorise the renewal of Syria’s cross-border aid mechanism a day before it expired. The renewal, which extends the mechanism for another six months, will permit humanitarian deliveries to 4 million Syrians in Northwest Syria.

On December 23, U.S. President Joe Biden signed the 2023 National Defence Authorisation Act into law which includes a proposal for an interagency strategy to combat the Syrian regime’s production and trafficking of captagon and other narcotics. The Act, which was included in the USD 858 billion defence spending bill, requires several federal agencies to provide U.S. Congress with a strategy to dismantle the narcotics industry in Syria.

The Iraqi government implemented a decision to allow Syrian trucks to enter the country for the first time since the COVID-19 pandemic three years ago.

Details published in the Official Gazette have provided more information about Syria’s 2023 budget, including indications on allocations to the Ministry of Defence.

Protests against rising living costs in the Suweida governorate have continued into the start of the new year, pushing the government to temporarily recall the province’s governor in a rare political move and to increase military salaries. Meanwhile, the Central Bank of Syria has devalued the exchange rate of the Syrian pound by more than 50 percent.

Syria’s wheat import bill stood at USD 552 million last year, according to a government official. A significant share of the supplies, which are overwhelmingly from Russia, appears to be stolen Ukrainian wheat.

Syria’s unprecedented fuel crisis, which was triggered by the suspension of Iranian oil supplies, has entered its third week, causing significant price surges and leading the government to implement several emergency measures, including shutting down state institutions until the beginning of the year.

Initial data from Syrian officials indicate that the inflation rate this year is in the high double-digit levels, although the pace of the increase is slightly lower than in 2021.

The government is planning to significantly decrease allocations for flour and wheat subsidies next year, according to Syria's 2023 draft budget.

Last month, the Ministry of Domestic Trade and Consumer Protection increased the minimum capital requirements for establishing companies in Syria by up to 900 percent.

The Syrian president recently issued two decisions increasing the salaries of Syrian judges, while the Autonomous Administration of North and East Syria raised public employee salaries.

The number of early recovery projects (ERPs) implemented inside opposition areas has increased by nine percent during the first six months of the year compared with the same period last year. Meanwhile, hundreds of ERPs have been implemented in areas controlled by the Autonomous Administration of North and East Syria.

Earlier this month, the government raised the prices of basic imported commodities, putting more financial strain on Syrians who are unable to keep pace with the rising cost of living.

French building materials company Lafarge has agreed to pay USD 778 million in fines and forfeitures to the United States government after pleading guilty to conspiring to provide material support and resources to the Islamic State and the Nusra Front between 2013 and 2014. The case marks the first time a company pleads guilty in the United States for funding a terrorist organisation.

Through the supply of wheat and crude oil, currently the two most coveted commodities in the world, Moscow and Tehran continue to provide economic aid that is key to the survival of the Syrian regime.