IMF: Syria's Economy Gains Additional Momentum

(MENAFN) The International Monetary Fund warned Wednesday that sustained international backing remains critical to Syria's fragile recovery, even as the organization signaled meaningful economic progress in the war-battered nation.

The IMF confirmed that an official delegation traveled to Damascus earlier this month to evaluate economic conditions, review reform progress, and identify policy priorities and capacity development needs. The fund noted that momentum has strengthened in recent months, buoyed by firming consumer and investor confidence, the continued return of refugees, increased electricity supply, higher rainfall, and Syria's broader reintegration into regional markets.

"The IMF's program of engagement aims to support the authorities' efforts to rehabilitate Syria's economy and key economic institutions with policy advice and technical assistance," the fund stated. "This includes extensive support to the Ministry of Finance and to the Central Bank of Syria, as well as improving statistics, which would also help pave the way for the resumption of Article IV consultations with Syria."

Ron van Rooden, who led the delegation, painted a cautiously optimistic picture, citing accelerating activity, steadily improving confidence, the removal of international sanctions, and Syria's growing reintegration into regional and global economies. He pointed to progress on national reconciliation, returning refugees, rising energy supply, and several large incoming investment projects as encouraging signals for the country's growth outlook in 2026 and beyond.

On the fiscal front, van Rooden said Syrian authorities are crafting a 2026 budget with increased allocations for healthcare, education, infrastructure rehabilitation, and wage growth. He described the accompanying revenue projections as ambitious yet attainable.

"For the coming years, strong international support remains needed to help alleviate poverty, including among returning refugees and internally displaced people. At the same time, the authorities' ability to mobilize external financing will depend on progress toward addressing Syria's legacy debts," said Van Rooden.

Despite operating under severe institutional constraints, the Central Bank of Syria has maintained a disciplined monetary stance, van Rooden noted. With the government refraining from central bank budget financing, inflation has decelerated sharply — falling to low single digits by end-2025 — while the Syrian pound has appreciated relative to 2024 levels.

"With the introduction of the new currency well underway and building on the progress made, the focus will now need to be on empowering the central bank to ensure price and financial stability and ensuring its independence, developing an appropriate monetary policy framework, as well as on conducting a thorough assessment of banks' financial health and on the restructuring and rehabilitation of the banking system," he added.

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