No ‘overnight boom’ for Syria's economy despite lifting of sanctions

Arun Leslie John , The National, May 15, 2025

The lifting of US sanctions bodes well for Syria but improved security and legislative changes will be key to revive the war-torn country's battered economy, analysts say.

US President Donald Trump, in the middle of a Middle East tour this week, announced the lifting of sanctions before his high-profile meeting with Syrian leader Ahmad Al Shara in Riyadh.

That led to celebrations in Damascus, with citizens cheering under a familiar theme: “Make Syria Great Again”.

The first effect would be a breath of economic relief after years of suffocation, as sanctions had hindered trade, investment and the Syrian lira. But the success of the economic redevelopment would hinge on a streamlined government programme.

Syria's top exports in 2010 and 2023

The lifting of sanctions, “if followed by concrete steps that bring tangible benefits to the Syrian population, could contribute to jump-starting reconstruction and attracting new investment”, Rim Turkmani, director of the Syria Conflict Research Programme at the London School of Economics and Political Science, told The National.

“However, this alone is insufficient. The establishment of rule of law and significant improvements in security remain prerequisites. Without these conditions, we are likely to see only limited reconstruction efforts, primarily funded by Gulf countries.”

Huge bills yet to be paid

The civil war in Syria began after the suppression of a peaceful protest movement calling for the removal of then-president Bashar Al Assad in 2011 and subsequent fighting against opportunistic extremist groups such as ISIS – resulting in the devastation of infrastructure, displacement of skilled labour and the draining of domestic industry.

The national economy, which was maintaining a brisk pace of growth before the protests, has struggled since: gross domestic product plunged 6.4 per cent in 2016 before gradually recovering, government data shows.

Syria's GDP growth over the past decade

The Syrian economy has been devastated by the civil war, with the UN's Development Programme estimating cumulative losses – including physical damage and economic deprivation – at more $923 billion at the end of last year.

The estimated cost of reconstruction, meanwhile, has varied from $250 billion and $500 billion.

The evolution of Syria's top trade partners

Those have been high on Damascus's agenda: in March, Syrian President Ahmad Al Shara announced new members in his government, appointing 23 ministers in a broadened cabinet, a move seen as an important milestone in the transition from decades of Al Assad family rule and the improvement of ties with the west.

That addresses a “profound lack of inclusivity”, said PeaceRep, an international research consortium led by the Edinburgh Law School.

Multilateral institutions such as the IMF, the World Bank, the International Finance Corporation, and the European Bank for Reconstruction and Development are expected to engage more in Syria to rebuild its economy, said Nassib Ghobril, chief economist at Beirut's Byblos Bank.

Syrian currency

The Syrian lira appreciated sharply against the US dollar following the announcement, with an exchange rate of 11,000 lira to $1 on Tuesday, compared to 12,000 lira the day before, according to the Syrian News Agency report. The currency, however, fell to 13,000 lira against the dollar as of Thursday.

Value of Syrian pound against US dollar since 2011

Under the former regime, the Syrian currency collapsed, reaching 15,000 lira to the dollar on the eve of Mr Al Assad’s downfall on December 8, compared with 50 lira to the dollar on the eve of the revolt against his rule in March 2011.

Tech reboots

The technology sector is also set to gain from sanctions lifting, especially with the reopening of access to US majors such as Google, which are among the services affected by the sanctions.

Restricting access to software and services are limiting people and businesses from using tools like Google Analytics, Google Ads and other essential digital business services, which would companies can use to their advantage, according to the research arm of Syrian Future Movement, a national civil political entity.

“Syrian companies, along with collaborative efforts from multinationals operating in these sectors, could potentially find significant opportunities as the country rebuilds itself,” Arun Leslie John , chief market analyst of Dubai-based Century Financial, told The National.

Back on the investment radar

Last month, Mr Al Shara visited the Emirates for the first time since taking office and President Sheikh Mohamed pledged the UAE would “spare no effort in providing all possible support to Syria” to help the country rebuild.

Shortly after that, the UAE General Civil Aviation Authority announced flights between the two countries would resume.

Also last month, Saudi Arabia and Qatar agreed to settle Syria's outstanding debts of about $15 million to the World Bank, as part of their efforts to “support and accelerate the recovery of the Syrian Arab Republic’s economy”.

The further Syria's economy is supported and opens up, the more opportunities there will be, especially for domestic firms such as importers, distributors and contractors – but they should act fast.

Syria's oil production 2003-2023

Equally important is the recovery of Syria’s productive sectors, particularly agriculture and manufacturing, which were severely weakened by the conflict and compounded by sanctions.

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