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Skyrocketing Prices Swallow Up Recent Salary Increase

Economists concur that the wage increase, alongside subsidy eliminations, will likely fuel further inflationary pressures, Enab Baladi writes.
Skyrocketing Prices Swallow Up Recent Salary Increase

The recent surge in public sector wages, coupled with the removal of subsidies on fuel and oil derivatives, has triggered a sharp rise in inflation, eroding the purchasing power of Syrians by over 25% since the onset of 2024.

Yasser Ikreem, a member of the Damascus Chamber of Commerce, highlighted that the spike in fuel and electricity costs has effectively offset the monetary gains from salary hikes. Though there has been a slight uptick in market activity, Ikreem underscored the persisting weakness in citizens’ purchasing power, rendering it insufficient to meet their basic needs.

Economists concur that the wage increase, alongside subsidy eliminations, will likely fuel further inflationary pressures and exacerbate citizens’ financial strain. To mitigate this, they advocate for measures addressing production costs to temper price escalations.

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Ikreem asserts that genuine salary increments should entail structural economic reforms to address underlying monetary issues, bolster income levels, and combat inflationary trends.

According to the state-run Al-Baath newspaper, prices across all food and non-food items have surged by a quarter over the past two months.

Regime-affiliated economists acknowledge market price hikes driven by escalating expenses and inflation, placing the burden squarely on consumers. They caution that elevated prices could depress demand, leading to decreased production, and exacerbating the problem of surplus cash in circulation.

Experts note that recent and prior salary hikes have contributed to an accumulation of excess liquidity in Syrian pounds, outpacing corresponding increases in goods supply due to production limitations.

They contend that future wage boosts will likely draw from the same funding sources—be it through fuel price hikes, currency printing, or increased taxes. To alleviate price pressures and stabilize the dollar exchange rate, experts advocate for increased production and the removal of restrictive economic policies imposed by the Central Bank.

In early February, Syrian President Bashar al-Assad issued two presidential decrees, raising government sector employees’ and retirees’ salaries by 50%, alongside doubling the price of subsidized bread.

The regime preempted the salary increase by hiking subsidized and unsubsidized gasoline prices, as well as free diesel, marking the third such adjustment since the beginning of 2024.


This article was translated and edited by The Syrian Observer. The Syrian Observer has not verified the content of this story. Responsibility for the information and views set out in this article lies entirely with the author.

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