QAMISHLI, Syria (North Press) – Since mid-2025, Syria has entered an economic phase that appears, at least on the surface, different from what preceded it. This shift comes with the gradual lifting of Western sanctions and an unprecedented flow of investment promises, set against a heavy legacy of external debt, deep economic contraction, and widespread poverty.
At the same time, the Syrian transitional government is preparing to launch a new Syrian currency in early 2026, in an attempt to reset the monetary landscape after years of inflation and collapse.
Partial lifting, persistent limits
The U.S. decision to end the comprehensive sanctions program on Syria, under a presidential decree issued on June 30, 2025 (which entered into force on July 1), marked a political and economic turning point. It dismantled the broad legal framework that had restricted engagement with the Syrian state as an institution. However, this shift was not absolute. Washington maintained a system of targeted sanctions against individuals and entities linked to the al-Assad regime and those implicated in human rights violations, drug trafficking, and activities the United States deems “destabilizing.”
Similarly, during 2025 the European Union and the United Kingdom eased most general economic sanctions, particularly those hindering engagement with the energy and transport sectors and certain government institutions, while retaining individual and sectoral sanctions tied to chemical weapons, narcotics, and human rights files.
At present, Syria is not subject to a comprehensive UN sanctions regime, theoretically opening the door to reintegration into the international economy.
Yet reports by the International Monetary Fund (IMF) and the World Bank warn that lifting legal sanctions does not automatically translate into Syria’s return to the global financial system. This is due to ongoing “de-risking” policies, whereby international banks avoid dealings with post-conflict countries because of weak compliance systems, money-laundering risks, and a lack of institutional transparency. This explains the gap between political rhetoric about “lifting sanctions” and the economic reality, which has yet to witness major financial inflows or a genuine banking revival.
Investment promises
In October 2025, Syrian Transitional President Ahmad al-Sharaa announced during his participation in the Future Investment Initiative conference in Riyadh that Syria had attracted foreign investment pledges estimated at around $28 billion during the year, with signed contracts nearing $14 billion. These focus on infrastructure, transport, and several major development sectors.
Saudi Arabia topped the list of pledging countries, with more than $6 billion in commitments covering real estate, infrastructure, telecommunications, and information technology, alongside ongoing negotiations with other Gulf states, Turkey, and Jordan.
However, reports from the United Nations Conference on Trade and Development (UNCTAD) indicate that post-conflict countries typically receive, in their early years, less than one-third of announced pledges as actual investments on the ground. This is due to weak legal environments, unstable property rights, and the absence of an independent commercial judiciary.
World Bank and European Union estimates place the cost of Syria’s reconstruction at around $216 billion as a “conservative estimate.” Even if fully realized, the announced investments would cover only a limited portion of the financing gap needed to rebuild the economy, raising questions about spending priorities and geographic and social equity in the distribution of projects.
External debt: a complex political and economic legacy
The Syrian transitional government faces a thorny challenge in the form of external debt, which international financial institutions estimate at $20–23 billion—equal to or exceeding Syria’s current GDP.
World Bank reports indicate that the bulk of this debt is owed to Iran, estimated at around $17 billion, in addition to debts to Russia linked to arms contracts, sovereign loans, and long-term concessions in the energy, ports, and phosphate sectors.
Unofficial estimates suggest actual claims could reach $30–50 billion if military and political financing provided by allies of the al-Assad regime is taken into account.
According to United Nations Development Programme (UNDP) reports, these debts fall under what is known as “conflict debt,” requiring political and negotiated solutions rather than purely traditional financial ones, as seen in cases such as Iraq and Sudan.
This file is directly tied to renegotiating strategic concessions and military bases, making external debt a key lever in the struggle over economic sovereignty in post-Assad Syria.
Widespread poverty and deep contraction
On living-conditions, UN data show that the Syrian economy has lost more than half its size compared to pre-2011 levels. Gross national income per capita fell to about $830 in 2024, placing Syria among low-income countries. These indicators coincided with a severe liquidity crisis in the banking sector during 2024 and 2025.
UN reports indicate that roughly one-third of Syrians live in extreme poverty, while about two-thirds live below the poverty line used for lower-middle-income countries.
Other estimates suggest that up to 90 percent of the population has been affected in one way or another by poverty, whether monetary or multidimensional, including limited access to food, education, and healthcare.
Prices of basic goods recorded a cumulative increase of more than 50 percent during the first half of 2025, with UN warnings of further potential spikes in 2026 if monetary reforms are not accompanied by fiscal discipline and effective social protection policies.
New Syrian currency: monetary reform or social risk?
In an attempt to address monetary distortions, the transitional government and the Central Bank announced the launch of a re-denominated Syrian currency by removing two zeros from the current currency, so that one new pound equals 100 old pounds. Official exchange is set to begin on Jan. 1, 2026, under Decree No. 293 of 2025.
According to official statements, the move aims to simplify cash transactions, ease logistical burdens, and restore confidence in the currency after years of severe inflation.
However, international experiences documented by the IMF show that the success of currency redenomination depends on strict conditions, foremost among them fiscal discipline, central bank independence, and sufficient foreign-exchange reserves.
With banks closing at the end of 2025 to hand liquidity over to the central bank, concerns are emerging about price confusion or a new wave of inflation if the transition is mismanaged. This makes the new currency a real test of the state’s ability to manage economic confidence, rather than merely a cosmetic change.
Economic indicators reveal that the “new Syria” stands at a sensitive crossroads between a historic opportunity to reintegrate into the global economy and deep structural risks inherited from years of war and sanctions.
Between partial sanctions relief, major investment promises, heavy debt, widespread poverty, and a challenging monetary reform, the central question remains: Will the new authorities succeed in translating political change into tangible economic improvement in the lives of Syrians?