Syria, 2011–2024, and the Economy After Assad

Syria’s war began as a political uprising in 2011 and became one of the most destructive conflicts of the century. It left a middle-income economy shattered, its currency almost worthless and half its people forced from their homes. Then, in December 2024, the government of Bashar al-Assad fell. Within a year most international sanctions were lifted. This chapter follows the economy through both phases: the long collapse during the war, and the uncertain recovery that began after it. It also shows how hard it is to measure an economy at war. Different official sources often disagree, and we will point this out where it matters.

1. Background: how the war began

Protests against the government began in March 2011. At that time one US dollar bought 47 Syrian pounds.^[13] The government responded with force, and the unrest turned into a multi-sided civil war. The government, backed by Russia and Iran, fought a range of armed opposition groups. The Islamic State group (ISIS) seized territory in the east. The Kurdish-led Syrian Democratic Forces (SDF), backed by a US-led coalition, came to control most of the north-east, including most of the oil fields.^[4]

The human cost was enormous. In 2022 the UN Human Rights Office estimated that nearly 307,000 civilians were killed in the first ten years of the conflict, from March 2011 to March 2021.^[8] By the end of 2021, UNHCR counted 6.85 million Syrian refugees in other countries.^[6] Millions more were displaced inside Syria.

Sanctions grew over time. The United States had labelled Syria a “state sponsor of terrorism” in 1979 and imposed a broad economic embargo by executive order in 2011.^[10] In December 2019 President Trump signed the Caesar Syria Civilian Protection Act. It allowed the US to punish foreign firms and governments that dealt with the Assad government, including those helping with reconstruction.^[9] The European Union also had a wide sanctions regime.^[11]

The front lines froze after about 2020. The economy did not recover. A financial crisis in neighbouring Lebanon from 2019, the COVID-19 pandemic, the war in Ukraine and the February 2023 earthquakes all hit Syrian households.^[4] In late 2024 an opposition offensive reached Damascus, and the Assad government fell in December 2024.^[13] UNHCR uses 8 December 2024 as the start date for counting refugee returns.^[7]

2. Where things stand now

As of October 2026, Syria is in a fragile recovery. The World Bank’s October 2026 report says domestic security improved in the first half of 2026. A new parliament has been formed, the SDF has been dissolved, and the north-east is being brought into national institutions. Syria has also been removed from the US list of state sponsors of terrorism.^[2]

Growth is picking up. The World Bank estimates growth of 3.6% in 2025 and projects 8–10% in 2026.^[2] IMF staff, after a visit in July 2026, said growth could exceed 10% in 2026.^[15] Cement production reached 4.1 million tonnes in the first half of 2026, close to pre-war levels. Night-time light intensity, a satellite measure of economic activity, rose by 8.4% year on year. Better rainfall helped Syria become self-sufficient in wheat for the first time since 2010.^[2]

Not everyone agrees on the numbers. In March 2026 President Ahmed al-Sharaa said GDP had grown by 30–35% in 2025, to about $32bn, according to Reuters.^[17] The World Bank’s estimate of growth for the same year is 3.6%.^[2] Students should notice how large such gaps can be after a war, when statistical offices are weak.

People are coming home. From December 2024 to the end of July 2026, more than 1.75 million refugees and 1.97 million internally displaced people returned. That is more than 3.7 million of the 16 million Syrians displaced during the conflict.^[2] But 15.6 million people still needed humanitarian help in 2026, according to UNHCR.^[7]

The regional war involving Iran that began in 2026 has had mixed effects. It raised fuel, food and transport costs, pushing inflation back up.^[2][15] Inflation reached 27.5% year on year in April 2026.^[2] At the same time, Syria has become a transit route. The World Bank reports that Iraqi petroleum products are now carried through Syria for export from the port of Baniyas.^[2]

3. The economy before the war

Before 2011 Syria was a fast-growing lower-middle-income country. Real GDP grew by an average of 4.3% a year between 2000 and 2010, driven mainly by sectors other than oil. Inflation was modest.^[4] Trade was growing: imports plus exports reached 76.5% of GDP just before the 2008 global financial crisis.^[4]

Extreme poverty was almost absent. In 2006–07 only 2.83% of people lived on less than $2.15 a day, and 16.36% lived on less than $3.65 a day.^[4] GDP was $61.4bn in 2010 and $67.5bn in 2011 in current dollars.^[1] The population was about 22.5 million in 2010.^[1]

Oil mattered, but less than in many neighbouring countries. Syria produced about 383,000 barrels a day in 2010, according to the US Energy Information Administration (EIA).^[4] Wood Mackenzie, an energy consultancy, puts pre-war output at roughly 380,000 barrels a day of oil and 900 million cubic feet a day of gas.^[14] Production was already declining before the war because the fields were ageing.^[4] Oil rents, the value of oil output minus the cost of extracting it, were 3.8% of GDP in 2010.^[1]

The economy had weaknesses too. The state was large, the private sector was dominated by politically connected businesses, and unemployment was 8.6% in 2010 by the International Labour Organization’s modelled estimate.^[1]

4. The economic impact: indicator by indicator

4.1 Output and GDP

Output collapsed in the first years of the war. World Bank data show real GDP falling by about 26% in both 2012 and 2013, and by a further 10.3% in 2014.^[1] By 2022 real GDP was nearly 53% lower than in 2010.^[3]

In dollar terms the fall looks even larger, because the pound also collapsed. GDP fell from $67.5bn in 2011 to $12.6bn in 2016.^[1] Estimates for recent years vary a lot by source and method. World Bank data put GDP at $23.7bn in 2022.^[1] The World Bank’s 2024 Syria Economic Monitor used a much lower figure of $6.2bn for 2023.^[4] Its 2025 reconstruction report estimates $21.4bn for 2024.^[3] Its October 2026 report gives $30.6bn for 2025, based on Ministry of Finance data.^[2] The gap reflects which exchange rate is used to convert pounds into dollars, and how much informal and illegal activity is counted.

Gross national income (GNI) per person was only $830 in 2024, according to the World Bank.^[5] Before the war, GDP per person was $2,952 in 2011.^[1]

4.2 Inflation and the Syrian pound

The Syrian pound lost almost all its value. The official rate fell 270-fold between 2011 and 2023, from 47 to 12,562 pounds per dollar. The market rate fell 300-fold, to 14,122.^[4] The World Bank says the fall sped up after Lebanon’s financial crisis began in late 2019, because many Syrians kept money in Lebanese banks. New US sanctions in mid-2020 encouraged capital flight and cut remittances, the money sent home by Syrians working abroad. Since 2020 the pound has lost over 90% of its value on the parallel (unofficial) market.^[4]

A falling currency makes imports more expensive, so prices rise. Inflation was 36.7% in 2012, 40% in 2013 and 47.7% in 2016.^[1] In 2023 the pound fell by 141% against the dollar and consumer prices rose by an estimated 93%, according to the 2024 Syria Economic Monitor.^[4] The World Bank’s October 2026 figures show inflation of 130% in 2023 and 108% in 2024.^[2] Again the sources differ, partly because they use different price measures.

After Assad fell, the pound recovered. In 2025 Syria experienced deflation, a fall in the price level, of 27%, according to World Bank estimates.^[2] On 4 December 2025 the pound was quoted at 11,057 per dollar.^[12] The new authorities then removed two zeros: 100 old pounds became one new pound. When the new notes went into circulation, exchange shops in Damascus sold a dollar for 11,800 old pounds, or about 118 new pounds.^[13] Inflation returned in 2026, and the World Bank projects an average of 21.4% for the year.^[2]

4.3 Public finances

During the war the government relied heavily on the central bank to finance its deficits. In December 2025 the central bank governor said Syria would end seven decades of central bank financing of government budget deficits.^[12] Printing money to pay for spending is a classic cause of inflation in wartime.

Public finances improved sharply after the war. The budget swung from a deficit of 2.7% of GDP in 2024 to a small surplus of 0.2% in 2025.^[2] In the first half of 2026, revenues more than doubled, to 309 trillion pounds, helped by customs, oil and telecommunications receipts. Spending rose faster, to 419 trillion pounds, because of higher public-sector pay and capital spending. The result was a deficit of about 4.7% of GDP for the half-year.^[2] The 2026 budget was set at about $10.5bn, almost three times the 2025 level, with about 40% going to health and education, according to Reuters.^[17] The World Bank projects a deficit of 3.4% of GDP for 2026 as a whole.^[2]

Syria’s access to outside finance is still limited. The World Bank has found satisfactory progress on debt sustainability and has increased grant allocations for 2027. Earlier projects included $146m for electricity grid reform and $20m for public financial management.^[16] The IMF says monetary policy is “severely constrained by a highly dysfunctional banking system”.^[16]

4.4 Trade, oil and key sectors

Trade collapsed. Exports of goods and services fell from 32.2% of GDP in 2010 to 7.8% in 2013 and 6.8% in 2022.^[1] Official figures put legal exports at about $960m in 2023.^[4]

Oil production fell from 383,000 barrels a day in 2010 to 90,000 in 2023, according to EIA figures quoted by the World Bank.^[4] Most of what remained was outside government control. The SDF and coalition forces controlled most fields in Deir ez-Zor and Hasakeh, which accounted for over 85% of output.^[4] Wood Mackenzie says national output had fallen to 50,000–80,000 barrels a day by 2021.^[14] In January 2026, government forces moved to take control of fields in Deir ez-Zor and Raqqa, including the Omar oil field, after the SDF withdrew under an agreement with Damascus.^[14] The World Bank now notes that “the Government [is] now receiving oil revenues”, so higher world oil prices help the budget.^[2]

Data from the Energy Institute, which records officially reported output, show an even steeper fall: production in 2023 was roughly a tenth of its 2010 level in energy terms.^[19] The difference from the EIA figure is a reminder that a large part of wartime output was produced outside the government’s control and was not reported.^[4] For the government, the loss mattered twice. It lost export earnings in foreign currency, and it had to import fuel it once produced, which was a major drain on scarce dollars. The World Bank called securing oil imports “a major challenge” as late as 2025.^[5]

The February 2023 earthquake also damaged the Banias refinery, Syria’s largest, and disrupted electricity and supply chains.^[4] Agriculture, once a large employer, suffered from conflict and drought. The wheat harvest of 2026 was the first since 2010 to make Syria self-sufficient, after a record drought in 2025.^[2]

4.5 The captagon economy

As the legal economy shrank, an illegal one grew. Captagon is an addictive amphetamine-type drug sold mainly in the Gulf states. In its Spring 2024 Syria Economic Monitor, the World Bank used data on drug seizures around the world to estimate the market. It found that government-controlled Syria and nearby towns in Lebanon appeared to have “a near-monopoly” on production. The Gulf Cooperation Council (GCC) countries accounted for almost 90% of the regional market.^[4]

The World Bank put the total market value of Syrian-origin captagon at between $1.9bn and $5.6bn a year. It estimated that actors linked to Syria earned between $0.6bn and $1.9bn a year. That compares with legal exports of about $960m in 2023.^[4] In other words, captagon “may have become the most valuable sector” of the economy, in the World Bank’s words.^[4] These are estimates. They depend on assumptions about how much of the trade is seized, and it is unclear how much of the money ever returned to Syria.^[4]

4.6 Labour market and refugees

The war caused one of the largest displacements of modern times. The number of Syrian refugees abroad rose from about 20,000 in 2011 to 6.85 million in 2021, according to UNHCR. Internally displaced people (IDPs), those forced to move within the country, peaked at 7.4 million in 2024.^[6] The population fell from 22.9 million in 2011 to 19.2 million in 2016.^[1]

Losing so many working-age people shrinks the labour force and the stock of skills. Unemployment rose from 8.6% in 2010 to 14.8% in 2014, by the ILO’s modelled estimate.^[1] Official unemployment is about 13%, but in 2025 a Syrian minister said the real figure was closer to 60%, according to the Institute for National Security Studies (INSS), an Israeli think tank, citing Al Jazeera.^[18] Such a gap shows how much work is informal or hidden.

Returns are now reversing part of the flow. By the end of 2025 UNHCR’s count of refugees abroad had fallen to 4.87 million.^[6] The World Bank warns that job creation “is unlikely to keep pace” with the larger workforce. The minimum wage rose from 7,500 pounds in July 2025 to 12,560 in May 2026, but it still covers less than half of a basic household basket of goods.^[2]

4.7 Poverty and human development

Extreme poverty rose from a negligible level in 2009 to about 25% by mid-2022, based on surveys by humanitarian organisations.^[4] In 2025 the World Bank said about one in four Syrians lived in extreme poverty and about two-thirds lived below the lower-middle-income poverty line.^[5] Its October 2026 estimates, using new poverty lines, show 21.8% of people below $3.00 a day in 2025 and 47.8% below $4.20 a day. It projects a small fall in 2026 despite fast growth, because prices are high and food aid has been cut.^[2]

Aid itself has been shrinking. Humanitarian funding fell by 5% in 2023, to $2.8bn.^[4] UNHCR’s 2026 appeal for Syria was $323.9m.^[7]

4.8 Sanctions

Sanctions affect an economy through trade, finance and investment. Under the Caesar Act, anyone dealing with the Syrian government, including on reconstruction, risked US penalties.^[9] Banks avoided Syria, and the World Bank listed frozen assets as a constraint on energy supply, aid and trade.^[5]

The lifting came quickly after Assad fell. President Trump announced on 13 May 2025 that US sanctions would be lifted.^[10] The EU agreed on 20 May 2025 to lift economic sanctions, while keeping measures linked to the former government.^[11] The US suspended Caesar Act sanctions for 180 days in November 2025 and then repealed the law in December 2025.^[9] International bank transfers through the SWIFT system resumed in mid-2025.^[14] In May 2026 the EU resumed trade relations, and Visa and Mastercard allowed international card use, according to INSS.^[18]

5. What went well and what went wrong

What went well

• The new government kept spending under control in 2025, turning a deficit into a small surplus.^[2]
• The decision to end central bank financing of deficits addresses a key cause of past inflation.^[12]
• Fast sanctions relief reopened banking links, trade and investment.^[9][14]
• The return of oil fields to the state budget gives the government a new revenue source.^[2][14]
• Rapid refugee returns add workers, skills and demand.^[2]

What went wrong

• During the war, deficit financing by the central bank and the collapse of the pound drove inflation above 100%.^[2][4]
• Production shifted from legal to illegal activity, with captagon possibly the largest sector.^[4]
• The banking system remains “highly dysfunctional”, which limits monetary policy.^[16]
• Poor data make policy harder. The IMF says data gaps limit its assessment, and estimates of 2025 growth range from 3.6% to 30–35%.^[15][2][17]
• Higher public wages and rising energy prices have pushed inflation back above 20% in 2026.^[2]

6. The economics behind it

6.1 The production possibility curve shifts inward

A production possibility curve (PPC) shows the maximum combinations of goods an economy can produce with its resources. War destroys capital, such as homes, roads and power plants, and reduces labour through deaths and displacement. The World Bank estimates that physical damage equalled nearly one-third of Syria’s pre-war capital stock.^[3] This shifts the PPC inward.

6.2 Currency collapse and cost-push inflation

Syria imports much of its fuel and food.^[4] When the pound falls, the cost of these imports rises. Firms pass on the higher costs, so prices rise. This is cost-push inflation. In an AD/AS diagram, short-run aggregate supply (SRAS) shifts left: output falls and prices rise at the same time. When the government also prints money to fund deficits, aggregate demand in pound terms rises too, adding demand-pull inflation.

6.3 Sanctions, trade diversion and illicit markets

Sanctions raise the cost of legal trade. Firms and governments then look for other routes. Some trade is diverted to friendly partners; some moves into informal or illegal channels. The rise of captagon is an extreme example: a product that sanctions and law enforcement cannot easily stop, sold for hard currency.^[4] Lifting sanctions lowers transaction costs and should pull activity back into the formal economy, but only if banks and courts work.

6.4 Human capital and hysteresis

Human capital is the skills, education and health of workers. When millions leave and children miss school, the economy loses future output too. Economists call long-lasting damage from a temporary shock “hysteresis”. Returns of refugees can partly reverse it, which is why the World Bank sees returnees as a source of demand, labour and skills.^[2]

6.5 Opportunity cost and the “peace dividend”

Every pound spent on fighting is a pound not spent on schools, hospitals or roads. This is the opportunity cost of war. When fighting stops, resources can move back to productive uses. Economists call this a “peace dividend”. Syria’s 2026 budget shows the idea in practice: spending almost tripled, with about 40% for health and education and at least $3bn for an infrastructure fund, according to Reuters.^[17] The risk is that spending rises faster than revenue. The World Bank already expects the 2026 deficit to widen to 3.4% of GDP.^[2]

7. Outlook and the way forward

The size of the task. The World Bank’s October 2025 assessment covers 2011–2024. It estimates physical damage at $108bn: $52bn to infrastructure, $33bn to homes and $23bn to other buildings. Rebuilding would cost between $140bn and $345bn, with a best estimate of $216bn. That breaks down into $82bn for infrastructure, $75bn for homes and $59bn for other buildings. Aleppo and Rural Damascus need the most investment.^[3] The best estimate is nearly ten times Syria’s 2024 GDP.^[3]

Financing. If Syria’s GDP grew from about $30bn, rebuilding would take many years even if a large share of output went to investment. Domestic savings are small, so foreign money will matter. Gulf capital has started to return, and DP World signed an $800m ports deal.^[17] The World Bank is increasing grants.^[16]

Scenarios.

• Strong recovery: Growth of 8–10% in 2026 and “continued strong expansion” in 2027, as the IMF expects.^[2][15] This needs continued security, integration of the north-east, and better links to international banks.^[2]
• Stalled recovery: Renewed insecurity or a wider regional war could disrupt activity and delay financing. Weak infrastructure and the absence of an effective monetary policy leave the economy exposed.^[2]
• Jobless growth: Even with growth, jobs may not keep pace with returning workers, and high prices and less food aid could keep poverty high.^[2]

Policy priorities. The IMF recommends conservative budget assumptions and limits on current spending for 2027.^[15] The World Bank suggests using part of any oil windfall to protect the poorest households from rising prices.^[2] Restoring property rights is also important, since unresolved ownership of damaged homes blocks returns and investment.^[2]

8. Exam-style questions

Glossary

• Captagon: an illegal amphetamine-type drug, largely produced in Syria and sold mainly in the Gulf.
• Capital flight: the rapid movement of money out of a country by residents and investors.
• Deflation: a fall in the general price level.
• Gross national income (GNI): GDP plus net income received from abroad.
• Hysteresis: lasting damage to an economy’s potential from a temporary shock.
• Internally displaced person (IDP): someone forced from home who stays within their own country.
• Parallel market rate: the unofficial exchange rate set by supply and demand outside the official system.
• Production possibility curve (PPC): the maximum combinations of output an economy can produce with its resources.
• Redenomination: replacing currency with new notes that have fewer zeros.
• Remittances: money sent home by people working abroad.
• Sanctions: restrictions on trade or finance imposed by other countries to change a government’s behaviour.

References

1. World Bank (2026). “World Development Indicators: Syrian Arab Republic” (GDP growth, GDP in current US$, GDP per capita, inflation, official exchange rate, exports, unemployment, population, oil rents). Data updated 8 October 2026, accessed 14 October 2026. https://api.worldbank.org/v2/country/SYR/indicator/NY.GDP.MKTP.KD.ZG?format=json
2. World Bank (2026). “Syrian Arab Republic”. Macro Poverty Outlook, October 2026. https://thedocs.worldbank.org/en/doc/65cf93926fdb3ea23b72f277fc249a72-0500042021/related/mpo-syr.pdf
3. World Bank (2025). “Syria’s Post-Conflict Reconstruction Costs Estimated at $216 Billion” (Syria Physical Damage and Reconstruction Assessment 2011–2024). Press release, 21 October 2025. https://www.worldbank.org/en/news/press-release/2025/10/21/syria-s-post-conflict-reconstruction-costs-estimated-at-216-billion
4. World Bank (2024). “Syria Economic Monitor, Spring 2024: Conflict, Crises, and the Collapse of Household Welfare”. World Bank, May 2024. https://documents.worldbank.org/curated/en/099515505222471242/pdf/IDU12e419274142fc14ff31baf411ef0c0aef81c.pdf
5. World Bank (2025). “New World Bank Report Highlights Syria’s Economic Challenges and Recovery Prospects for 2025” (Syria Macro Fiscal Assessment 2025). Press release, 7 July 2025. https://www.worldbank.org/en/news/press-release/2025/07/07/new-world-bank-report-highlights-syria-s-economic-challenges-and-recovery-prospects-for-2025
6. UNHCR (2026). “Refugee Data Finder: population figures, country of origin Syrian Arab Republic, 2003–2025”. Accessed 14 October 2026. https://api.unhcr.org/population/v1/population/?coo=SYR&yearFrom=2003&yearTo=2025
7. UNHCR (2026). “Syria Operational Update, April 2026”. UNHCR, May 2026. https://www.unhcr.org/sites/default/files/2026-05/syria-operational-update-april-2026.pdf
8. United Nations (2022). “Syria: Decade of brutal war left nearly 307,000 civilians dead”. UN News, June 2022. https://operationalsupport.un.org/en/syria-decade-of-brutal-war-left-nearly-307000-civilians-dead
9. Enab Baladi (2025). “Trump signs repeal of ‘Caesar’ sanctions law”. 19 December 2025. https://english.enabbaladi.net/archives/2025/12/trump-signs-repeal-of-caesar-sanctions-law
10. Holland & Knight (2025). “President Trump Announces Intent to Lift Syria Sanctions”. 15 May 2025. https://www.hklaw.com/en/insights/publications/2025/05/president-trump-announces-intent-to-lift-syria-sanctions
11. Enab Baladi, citing AFP (2025). “EU agrees to lift sanctions on Syria”. 20 May 2025. https://english.enabbaladi.net/archives/2025/05/eu-agrees-to-lift-sanctions-on-syria/amp/
12. The New Arab, citing Reuters (2025). “Syria’s growth accelerates as sanctions ease, refugees return”. 5 December 2025. https://www.newarab.com/news/syrias-growth-accelerates-sanctions-ease-refugees-return
13. Associated Press, via ABC News (2026). “Syria begins circulating new post-Assad currency bills”. 2026. https://abcnews.go.com/amp/International/wireStory/syria-begins-circulating-new-post-assad-currency-bills-128864479
14. Wood Mackenzie (2026). “Syrian oil and gas production set to recover in 2026 as government regains control of key assets”. Press release, 21 January 2026. https://www.woodmac.com/ja/press-releases/syrian-oil-and-gas-production-set-to-recover-in-2026-as-government-regains-control-of-key-assets/
15. Enab Baladi (2026). “IMF: Syria’s Economy Could Grow by More Than 10% in 2026” (reporting IMF staff statement following 19–23 July 2026 visit). 5 August 2026. https://english.enabbaladi.net/archives/2026/08/imf-syrias-economy-could-grow-by-more-than-10-in-2026/
16. EnterpriseAM (2026). “IMF and World Bank endorse Syria’s fiscal reforms as recovery gathers pace”. 5 August 2026. https://enterpriseam.com/menaplus/2026/08/05/imf-and-world-bank-endorse-syrias-fiscal-reforms-as-recovery-gathers-pace/
17. AGBI, citing Reuters (2026). “Syria sets 2026 budget at around $10.5bn”. 20 March 2026. https://www.agbi.com/economy/2026/03/syria-sets-2026-budget-at-around-10-5bn/
18. Binstok, N. and Valensi, C. (2026). “The Race for $216 Billion: Syria’s Economy and Reconstruction Efforts in the al-Sharaa Era”. INSS Insight No. 2169, Institute for National Security Studies, 14 July 2026. https://www.inss.org.il/publication/syria-economy-2026/
19. Energy Institute (2026). “Statistical Review of World Energy: oil production by country”, via Our World in Data. Accessed 14 October 2026. https://ourworldindata.org/grapher/oil-production-by-country

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