Syria experienced a modest reprieve from accelerating inflation in the early months of 2025, according to consecutive monthly bulletins issued by the Syrian Center for Policy Research (SCPR). The reports, based on extensive field surveys across all regions of the country, detail a complex economic picture shaped by policy experimentation, currency volatility, and deep structural divides between competing governance zones.
In January 2025, the Consumer Price Index (CPI) fell sharply by 13 per cent—a correction following the sharp price surge observed in December 2024. This trend moderated in February, which saw a further 2.9 per cent decline month-on-month, though the annual inflation rate remained elevated at 15.9 per cent.
Currency Stabilisation and Monetary Constraints
These price movements were partly underpinned by a notable appreciation of the Syrian pound in the unofficial market, where it strengthened by 22.9 per cent in January and an additional 17.7 per cent in February. Despite this, significant disparities remained between the official and parallel market rates, fuelling uncertainty. The Central Bank’s liquidity retention policy—implemented through withdrawal limits and suspension of foreign currency deposits—constrained market activity but helped bolster the pound’s exchange rate temporarily. The Turkish lira, in contrast, continued its gradual depreciation in northwestern Syria.
Policy Shifts and Governance Gaps
January saw a flurry of monetary and fiscal measures implemented by Syria’s caretaker government, operating in a transitional post-regime context. The Central Bank cancelled daily transfer ceilings and eased banking restrictions, while the Finance Ministry suspended the 2025 budget in favour of a provisional “twelfth system” that prioritises short-term stabilisation.
However, the country’s economic fragmentation remains acute. Syria is divided into various governance zones—most notably the Syrian Interim Government (SIG), Autonomous Administration (AA), and the caretaker central authority—each enforcing distinct customs regulations, salary systems, and service delivery structures. This has led to region-specific price patterns and wage disparities.
Imports Surge, Local Production Falters
The caretaker government’s open import policy catalysed a flood of foreign goods into the domestic market, with imports exceeding USD 500 million over December and January. While this influx lowered prices in key sectors, it also squeezed domestic producers. Local factories struggled to compete with cheaper foreign products, particularly from Turkey, leading to widespread closures.
The disbanding of the Customs Police and creation of a General Authority for Land and Sea Ports aimed to standardise customs duties across most border points—excluding those managed by the AA. While this harmonisation boosted trade between regions, it also triggered unexpected inflation in Idleb and parts of rural Aleppo, where tariffs rose in February by 3.5 per cent and 4.7 per cent, respectively.
Consumption Trends and Inflation Drivers
Across both months, prices for essential goods generally trended downward:
- Food and Non-Alcoholic Beverages fell sharply—by 15.5 per cent in January—as the market saw price reductions in legumes, oils, seafood, and beverages. This trend continued into February, especially in AA-controlled regions.
- Clothing and Footwear prices dropped 8.8 per cent in February, attributed to the influx of second-hand European garments and Turkish brands, combined with subdued consumer demand due to income insecurity.
- Household Equipment, Tobacco, and Transportation categories also saw significant declines, thanks to increased imports, falling fuel prices, and currency gains.
In contrast, Housing, Water, Electricity, and Gas prices exhibited more mixed trends. In January, these sectors contributed to inflationary pressure due to supply bottlenecks and infrastructure gaps. By February, however, some relief emerged: subsidised heating oil and gas prices fell, while rental costs declined in less dynamic areas. Still, demand spikes in Damascus and its suburbs—driven by migration and public sector relocations—pushed rents higher in the capital.
Regional Variations and Labour Market Fragility
Geographical disparities persisted. Most governorates recorded price drops, with Daraa, Raqqa, and Deir Ezzor experiencing the steepest declines. Idleb and rural Aleppo, however, bucked the trend, with localized price increases driven by tariff changes and higher demand.
Wage levels across Syria reflect the fractured state of governance and the collapse of centralised payroll systems. In February 2025, average monthly wages were:
- Public university employees: SYP 580,000
- Private sector workers: SYP 990,000
- Civil sector employees: SYP 2.16 million
These figures fall dramatically short of established poverty thresholds. The absolute poverty line stood at SYP 2.54 million, the lower poverty line at SYP 4 million, and the upper poverty line at SYP 5.5 million. Public sector employees, especially those in areas under the caretaker government, earned well below the minimum subsistence levels, often facing delayed or suspended payments.
In contrast, civil servants in SIG and SSG zones earned above the abject poverty line, thanks in part to international assistance and more coherent administrative systems.
Outlook
While the CPI’s decline in January and February suggests short-term disinflationary momentum, the underlying economic vulnerabilities remain profound. The appreciation of the Syrian pound and reduced consumer prices offer temporary relief but are contingent on fragile fiscal and monetary policies. The lack of a unified legislative body, delayed budget implementation, and mass layoffs in the public sector signal deeper structural issues.
Syria’s economy continues to operate in survival mode. Despite tactical gains in price stability and currency management, the country faces steep challenges in restoring sustainable production, equitable wages, and unified governance. The growing gap between income and poverty lines highlights the precariousness of daily life for millions of Syrians as the transition period drags on without clear resolution.
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.
