Poverty Strikes 14.5 Million Syrians in their Country

Despite the improvement in weather conditions, agricultural production in Syria declined due to the displacement of farmers (Syrian Agricultural Media Account)
Despite the improvement in weather conditions, agricultural production in Syria declined due to the displacement of farmers (Syrian Agricultural Media Account)
TT

Poverty Strikes 14.5 Million Syrians in their Country

Despite the improvement in weather conditions, agricultural production in Syria declined due to the displacement of farmers (Syrian Agricultural Media Account)
Despite the improvement in weather conditions, agricultural production in Syria declined due to the displacement of farmers (Syrian Agricultural Media Account)

Two recent World Bank reports show that the poverty belt in Syria currently includes about 69 percent of the population, or about 14.5 million Syrian citizens.

For more than 10 years, Syria has been mired in conflict, leading to widespread devastation and humanitarian crises. The situation has worsened with the recent external shocks, as the two reports pointed to the continued lack of funding and limited humanitarian aid, which further depleted families’ ability to secure their basic needs, amid rising prices, a decline in basic services, and an increase in unemployment rates.

The Regional Director of the Middle East Department at the World Bank, Jean-Christophe Carret, said Syria witnessed multiple and overlapping shocks last year, more than a decade after the start of the bloodiest conflict of this century.

The economic situation in Syria continued to deteriorate in 2023, according to the updated monitor of the World Bank, a copy of which was obtained by Asharq Al-Awsat, as economic activity maintained its decline, and the value of the Syrian pound dropped significantly by 141 percent against the US dollar. At the same time, estimates indicate that consumer price inflation rose by 93 percent, due to the reduction in subsidies provided by the government.

Amid the economic slowdown, which is partly caused by the damage to infrastructure due to earthquakes and conflicts, public finance revenues continue to drop, prompting the authorities to further reduce spending, while tightly adjusting support programs.

Although agricultural production had improved due to better weather conditions over the previous year, the conflict severely affected the agricultural sector, with massive displacement of farmers and widespread damage to infrastructure and irrigation networks, leading to a decline in yields.

Conflict-related unrest has also severely affected foreign trade, and the collapse of domestic industrial and agricultural production has amplified Syria’s dependence on imports.

The Spring 2024 issue of the Syrian Economic Monitor expects the economic contraction to continue, as a result of the real GDP being exposed to an unprecedented state of uncertainty, leading to its decline by 1.5 percent during the current year.

A special section, which is focused on the main findings of the Syrian Household Well-Being Report, indicates that in 2022, poverty affected 69 percent of the population, or about 14.5 million Syrians.

Although extreme poverty did not actually exist before the outbreak of the conflict, it affected more than one in every 4 Syrians in 2022, and may have worsened due to the devastating effects of the earthquake in February 2023 and other several external factors, especially Lebanon’s financial crisis in 2019, the Covid-19 pandemic, and the war in Ukraine.



IMF Praises Saudi Arabia’s Unprecedented Economic Transformation

Efforts to diversify the economy have started to bear fruit: IMF (Asharq Al-Awsat)
Efforts to diversify the economy have started to bear fruit: IMF (Asharq Al-Awsat)
TT

IMF Praises Saudi Arabia’s Unprecedented Economic Transformation

Efforts to diversify the economy have started to bear fruit: IMF (Asharq Al-Awsat)
Efforts to diversify the economy have started to bear fruit: IMF (Asharq Al-Awsat)

The International Monetary Fund (IMF) has praised Saudi Arabia’s significant economic changes under the “Vision 2030” national transformation plan, noting improvements in public finances and business regulations.
An IMF mission expected non-oil growth in Saudi Arabia to reach around 3.5% in 2024, crediting careful economic policies and major reforms.
The mission also highlighted record-low unemployment rates and controlled inflation in the country, and welcomed recent updates to funding requirements aligned with “Vision 2030” goals.
The IMF released a concluding statement at the end of its official staff visit to Saudi Arabia.
In the statement, the IMF said: “Saudi Arabia’s unprecedented economic transformation is progressing well.”
“Prudent macroeconomic policies, transformative changes—including through fiscal reforms and in the regulatory business environment—and strong domestic demand have helped prop up non-oil growth. Inflation remains contained.”
“Spending reprioritization and recalibration of major spending programs are ongoing. Efforts to diversify the economy have started to bear fruit.”
“Building on these successes, it will be important to sustain the non-oil growth momentum, maintain financial sector stability, continue mitigating risks of overheating, reverse declining total factor productivity and ensure inter-generational equity.”
Economic Activity Remains Robust
According to the IMF, real non-oil growth decelerated from 5.3% in 2022 to a still robust 3.8% in 2023, driven mostly by private consumption and non-oil investment.
While non-oil growth for Q1-2024 indicates some moderation in economic activity— the IMF staff estimated that the output gap remains in positive territory, close to 2% of the non-oil potential GDP.
The statement also noted that the Saudi economy weathered the geopolitical tensions in the Middle East well, thanks to minimal trade and financial exposures to the affected regions and uninterrupted shipments.
Unemployment Rate Reached Historic Lows
In 2023, the Saudi economy added over one million jobs, primarily in the private sector. The overall unemployment rate for Saudis dropped to 7.7% in the last quarter of 2023—inching closer to the 2030 Vision objective of 7%.
Labor force participation rates have remained at historically high levels but relatively flat over the past year for both men and women, albeit with the women’s rate still comfortably exceeding the Vision 2030 goal of 30%.
Headline Inflation Has Decelerated Rapidly
After peaking at 3.4% in January 2023, year-on-year inflation receded to 1.6% in April 2024, helped by an appreciating nominal effective exchange rate.
However, rents are growing at a brisk rate of about 10% amid inflows of expatriate workers and large redevelopment plans in Riyadh and Jeddah.
Wholesale prices have also edged up recently, reflecting an increase in input costs. So far, some uptick has been observed in the wages of high-skilled workers.
Additionally, the current account surplus narrowed significantly.
The decline in the current account surplus from 13.7% of GDP in 2022 to 3.2% of GDP in 2023 mainly reflected lower oil exports and strong growth in investment-related imports.
These were partly mitigated by a record surplus in the services balance, including a 38 percent surge in net tourism income.
The Saudi Central Bank’s (SAMA) holding of net foreign assets reached $423.7 billion in April 2024, which was slightly above the end-2023 level.
Reserves remain ample, representing 15.6 months of imports and 208% of the IMF’s reserve adequacy metric by end-2023.