Syrian crisis to deepen with deterioration of Syrian pound: economist
DAMASCUS, Syria (North Press) – The economic crisis in Syria will intensify along with the deterioration of the value of Syria’s currency (the Syrian pound or SYP), a Syrian economist who refused to be named for security reasons told North Press on Monday.
“Syria will witness a frequent rise in prices, especially since the purchasing power of the [pound] has been decreasing.”
“This is due to the worsening economic crisis and stifling of the people by the regime,” he added.
The government’s production of strategic materials such as petrol and wheat has significantly decreased, which has affected the local market, according to the economist.
“The decline of revenues will have a negative impact,” he noted.
It is worth noting that the Syrian budget for the current year exceeds last year’s budget by billions, but when comparing it with the dollar exchange rate, it will be less than the last year.
Syrian President Bashar Assad approved the 2021 budget of 8.5 trillion SYP – an increase of 4.5 trillion from 2020 – however, the value of the 2021 budget does not exceed $2.9 billion USD according to the dollar exchange rate.
The decrease in the Syrian pound’s value comes as a result of several factors, including the Caesar Act, the impact of the economic crisis in Lebanon and the impact of the Beirut blast on the Lebanese banks which acted as an economic outlet for the Syrian government, in addition to coronavirus.
The recent US sanctions have targeted the Central Bank of Syria, which leads to more blockage of the Syrian government.
The budget deficit for 2021 is estimated at 3.48 billion SYP, while it was 1.45 trillion SYP last year, which means the deficit rate is estimated at 71%, according to the pro-government Watan newspaper.
As a result, the markets in Syrian government-held areas have been witnessing frequent price hikes since last year, coinciding with the decrease of the Syrian pound’s value against foreign currency.
Syria tops the list of the poorest countries in the world, as 90% of Syrians are living below the poverty line, according to WHO representative to Syria Akjemal Magtymova.
WFP spokesperson Elizabeth Byers warned of an unprecedented food crisis in Syria due to the coronavirus outbreak.