The International Monetary Fund said on Monday that Syria’s economy is showing signs of recovery and has prospects for improvement, after a visit of its team to Damascus from November 10-13.
“Syria’s economy is showing signs of recovery and improving prospects, reflecting the improvement in consumer and investor sentiment under Syria’s new regime, Syria’s gradual re-integration with the regional and global economy as sanctions are being lifted, and the return of more than one million refugees,” IMF Syria Mission Chief Ron van Rooden said in a statement.
He praised Syrian authorities for being able to adopt a tight fiscal and monetary stance within the many constraints they face, with a view to ensuring economic and financial stability.
Van Rooden explained that discussions in Syria focused on an “intensive program of engagement” to support the government reform roadmaps, particularly in the financial and banking sectors.
On November 9, Syrian President Ahmed al-Sharaa met during his visit to Washington with IMF chief Kristalina Georgieva to discuss Syria’s “economic transformation” the economic transformation Syrians need and deserve and the IMF's readiness to help, including through its existing technical support for key institutions.
Van Rooden said discussions in Damascus focused on the formulation of Syria’s 2026 government budget, which aims to increase spending on essential needs while ensuring ambitious but realistic revenue and financing assumptions.
The IMF said its staff will provide technical assistance to help improve revenue administration, finalize new tax legislation and develop a strategy to address Syria’s debts.
“As the authorities restructure state-owned enterprises and pursue large investment projects with the private sector, it is important to adhere to good governance standards and ensure that the Ministry of Finance plays a key role in assessing and controlling potential contingent liabilities,” van Rooden stressed.
At the monetary level, he said staff also initiated discussions on developing an appropriate monetary policy framework that would support ensuring low and stable inflation, while considering the current challenges in the financial system.
The staff will provide technical assistance to support the authorities with the formulation of new financial sector legislation and regulation; the rehabilitation of the payment and banking systems, to ensure that the financial system can facilitate safe and efficient payments, banks can resume their crucial role in financial intermediation and support the economic recovery; and rebuilding capacity at the central bank to ensure it can effectively implement monetary policy and supervise the financial system.
Van Rooden said reliable economic data remains scarce but is essential for the authorities to be able to formulate, implement, and monitor economic policies.
He noted that technical assistance will focus on improving statistics, which would also help pave the way for the resumption of Article IV consultations with Syria - the last Article IV consultation with Syria was concluded in 2009.
Also, the mission reaffirmed the IMF’s commitment to support authorities in their efforts to rehabilitate Syria’s economy and key economic institutions.
“Staff discussed with the authorities detailed reform roadmaps for the fiscal and financial sector, which will also help facilitate coordination among development partners,” van Rooden said.
The IMF's last Article IV consultation with Syria was concluded by its Executive Board on February 26, 2010, based on discussions held in late 2009.
Since then, official IMF talks with Syria were halted by more than a decade of civil war and sanctions that have severed the economy from the global financial system.
