The conflict in Syria has almost completed its seventh year. The war and external economic sanctions caused extensive damage to the Syrian economy. They affected all types of infrastructure (electricity, water systems, transport and communication), productive sectors (including oil and gas, tourism, manufacturing industry and agriculture) housing, as well as education and health facilities. Housing and industry have borne the brunt of destruction. The conflict had damaged or destroyed 27 percent of Syria’s housing stock and about half of the country’s medical and educational facilities. Capital destruction accounted for one-fourth of the decline in economic output during the first three years of the war, while deaths and forced displacement contributed close to a fifth.
The cumulative losses since the conflict erupted have been estimated at US$226 billion, about four times the Syrian GDP in 2010 (World Bank estimates, 2017).
In 2017, industrial and trading activity has started to recover and urban markets appear to function well, owing to the overall improved security situation and the opening of supply routes. To encourage local industry, the government reduced custom duties on raw materials by 50% (Decree no. 172/2017), and allowed industrialists to import petroleum products required for their factories.In mid-September, electricity cuts/rationing hours/ reduced tremendously in Damascus for the first time in roughly five years. The power situation has improved considerably in many parts around the country, including Aleppo, as a result of both new deals with Iran and the Syrian army’s advance on gas fields formerly controlled by ISIS.
How long will it take for the economy and society to recover after the war is hard to estimate. Estimates by the World Bank show that if a political solution is reached today and reconstruction begins, it will take 10 years for the Syrian GDP to get close to its pre-war (2010) real GDP level. International experience with post-conflict countries reveals that it will depend on the reconstruction strategy, implementation capacity and resources available from the international community.
The full report of the state of Syrian economy at the end of 2017 is at the beginning of SCB's Cost-of-Living Index Report.