Syria’s economic landscape continues to deteriorate nearly a year after the newly installed government pledged to improve living conditions and stabilise prices. Instead, the cost of living has soared, deepening the hardship of ordinary Syrians—a stark contrast to the promised recovery following the fall of the previous regime on 8 December 2024.
Key reforms—including subsidy reductions and market liberalisation—have been described by analysts as hasty and ill-considered. Rather than offering respite, they have compounded economic misery for a population already reeling from years of war, displacement and economic collapse.
Wages Raised, But Workers Dismissed
In January 2025, the then-caretaker Finance Minister Mohammed Abu Zaid announced a 400 percent increase in public sector salaries, expected to take effect in February. In practice, however, only a 200 percent increase was delivered, and that not until June—two months late. Analysts note that the modest increase falls far short of inflation, with many civil servants earning the equivalent of just $100 to $150 annually, a sum woefully inadequate for survival.
This gap between income and inflation has exacerbated poverty, with no parallel safety nets or support programmes in place. Compounding matters, unemployment hovers around 60 percent, according to Economy and Industry Minister Mohammed Nidal al-Shaar, meaning most Syrians remain vulnerable—either through joblessness or the diminishing purchasing power of their wages.
Human rights organisations and economic reports also record the dismissal of more than 100,000 civil servants for administrative or financial reasons, despite protests in various towns demanding their reinstatement. Many of the dismissed now earn under $30 per month—well below the threshold for survival.
Economist Younes al-Karim estimates that the 200 percent salary rise, offset by soaring prices for essentials like electricity and bread, covers only 20 to 30 percent of the real cost-of-living increase. The remaining 70 percent must be absorbed by citizens themselves. Entire swathes of the workforce—day labourers, small shopkeepers and the self-employed—are excluded from this increment altogether, widening inequality.
Speaking to Enab Baladi Syria, al-Karim estimated that 90 percent of Syrians now live below the poverty line. The public, once hopeful for economic improvement, now faces deepening destitution. He warned that the current trajectory will deter investment and undercut any attempt to stabilise healthcare, education or efforts to demilitarise social life.
Unplanned Market Liberalisation
Among the most damaging of the government’s reforms has been the abrupt liberalisation of the market without transitional safeguards to protect the poor. The removal of subsidies on key goods—bread and fuel among them—triggered a dramatic surge in prices: a bundle of bread jumped from 400 to 4,000 Syrian pounds; household gas from 30,000 to 150,000 pounds; and fuel from 2,500 to 15,000 pounds.
The Energy Ministry later introduced dollar-based pricing to mitigate some of the pressure: 90-octane petrol at $0.85 per litre; diesel at $0.75; household gas at $10.50 for a 10kg cylinder; and industrial gas at $16.80 for 16kg. Al-Karim welcomed the move as a potential buffer for transport and industrial costs but warned that implementation will be fraught with challenges.
He pointed out that pricing in dollars contradicts Article 51 of the Constitutional Declaration, which maintains the Syrian pound as the official currency unless explicitly revoked. Despite this, the Central Bank has allowed continued use of the lira. Three different exchange rates—remittance, official, and unfrozen reserves—have emerged, undermining price stability.
The disparity has made Syrian fuel cheaper than in neighbouring countries, fuelling smuggling and placing additional strain on state resources. To power electricity plants alone, Syria has tendered for seven million barrels, further burdening public finances. Al-Karim urged the Economy Ministry to adjust commodity prices accordingly, warning that short-term gains from dollar pricing could lead to long-term economic and security risks.
Electricity: Pledges Unmet
Electricity supply—one of the government’s key reform promises—remains largely unchanged. In January, caretaker Electricity Minister Omar Shaqrouq promised a rise in supply from six to eight hours per day within two months. In August, Government Communications Director Ahmad Suleiman raised expectations to ten hours within days. The current Energy Minister, Mohammed al-Bashir, forecast eight to ten hours pending the arrival of Azerbaijani gas. Yet reality tells a different story: electricity remains at four to five hours daily—at best—despite a 600 percent tariff hike.
Al-Karim warns that electricity bills could soon account for 60 to 70 percent of a citizen’s monthly income, up from 30 percent. This surge will also hit businesses, doubling or tripling the cost of goods and services. Even a simple falafel sandwich, reliant on refrigeration and electricity, may double in cost. The price of staple goods could increase two- to eightfold in coming weeks.
With local manufacturing now unviable due to electricity costs, Syria may become increasingly dependent on imports—cheaper in the short term, but economically harmful in the long run. Al-Karim predicts the government will prioritise imports to stabilise the currency, even at the expense of local productivity.
Exchange Rate Instability
Currency volatility remains a constant threat. The dollar has dropped from over 20,000 Syrian pounds last year to between 10,000 and 11,000 today. But without an official fixed rate, the market has descended into chaos, with traders pricing goods at peak exchange values, fuelling inflation and eroding consumer trust.
Despite repeated declarations from the Central Bank, three competing benchmarks now exist, causing market confusion. Traders now price according to unfrozen reserves rather than official rates, further weakening the lira. Even government entities now charge fines and fees in dollars—a trend al-Karim says signals the erosion of the national currency.
Investment Paralysed by Insecurity
Alongside economic disarray, the absence of security continues to repel investment. According to the Syrian Network for Human Rights, 7,552 people have been killed in 2025 alone, rendering the country too unstable for local or foreign investors.
Economic analyst Amer Diab told Enab Baladi Syria that stability begins with the economy. “There is no political or security stability without economic reform,” he said. In today’s Syria, he argued, financial control holds more sway than military force.
Investment viability is shaped by risk. In an unstable environment, only high-risk investors remain, hoping for high returns in exchange for significant exposure. In contrast, a stable economy draws more investors with more modest but consistent returns.
An Economy Without Horizon
The U.S. Caesar Act continues to be the foremost barrier to Syria’s economic recovery. It deters international companies and halts reconstruction efforts, eroding confidence in the Syrian market. Despite nearly $28 billion in signed memoranda of understanding, little has materialised on the ground.
Experts attribute this inertia to legal uncertainty, ongoing security concerns, the absence of a ratified investment code (pending a People’s Assembly that has yet to convene), and a lack of clear implementation mechanisms.
Without comprehensive reform—fiscal, political and legal—Syria’s economy remains at an impasse. Al-Karim concludes that prices rose by 53 to 55 percent in the first half of 2025, before electricity hikes took effect. A 100 to 200 percent increase is expected in the first half of 2026.
The current administration has inherited a broken economy: years of war, suffocating sanctions, institutional fragmentation, infrastructure collapse and rampant corruption. Reform must go beyond short-term fiscal fixes—it requires rebuilding trust, restoring institutions, and creating a stable environment for investment. Whether Syria rises toward recovery or descends further into ruin remains the central question of its economic future.
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.
