The humanitarian impact of the conflict continues to worsen. The estimated death toll has exceeded 220,000 people (UN); 840,000 were injured and many more held in custody (SCPR). As of March 2015, around half the Syrian population has been forced to leave their homes, with 7.6 million internally displaced, 3.8 million refugees (UNOCHA), and more than 1.5 million non-refugee migrants (SCPR). More than 12.2 million in Syria are in need of humanitarian aid, including 5.6 million children (UNOCHA).
The conflict has pushed millions of people into poverty, with four in five Syrians estimated to be living in poverty in 2014 (SCPR). The overall poverty rate was projected to be 82.5% in 2014, a significant increase compared to the estimated 64.8% rate in 2013 (SCPR). SCPR estimated that 64.7% of Syrians were living in extreme poverty in 2014, unable to meet basic food and non-food needs. While the accuracy of these estimates is difficult to gauge in a conflict situation, they remain highly indicative of the degree of deprivation facing the embattled Syrian population.
Key social outcomes have also deteriorated as a result of the conflict. Lack of access to health care and scarcity of medicine have led to a catastrophic health situation. Poor food availability and quality and successive cuts in subsidies on bread has exacerbated nutritional deprivation. SCPR estimates that by Q3-2014, 25% of all schools in the country (around 5,200 schools) were not operational, including 90% that were partially or completely destroyed and the remainder that were serving as shelters for IDPs. The share of schools that have ceased operations is projected to have risen to 28 percent by Q4-2014 (SCPR). Unemployment is estimated to have increased from 15% to 58% between 2011 and Q4-2014. Among the unemployed, about 3 million lost their jobs during the conflict, which adversely affected their 12.2 million dependents (SCPR).
The economy has witnessed a dramatic contraction since the beginning of the conflict. According to figures from the CBS, annual GDP growth before the crisis between 2004 and 2009 averaged 5.7%. Since 2012, the estimates diverged with EIU offering a more optimistic perspective than SCPR’s and ESCWA’s. SCPR and ESCWA converge in their projection that economic contraction has significantly slowed in 2014, with GDP falling to 38% (SCPR) or 48% of 2010 GDP (ESCWA). EIU, on the other hand, projects that the economy has bottomed out, with growth averaging a modest 0.5% in 2014, driven by the economy’s adjustment to the military stalemate in addition to the considerable migration of businesses to more stable coastal areas.
The conflict has caused a drop in government revenues and a spike in spending, sending the fiscal balance into severe deficit. ESCWA estimates a 2013 budget deficit of -26.3% of GDP. EIU estimates a deficit of -12.9 % in 2013 and projects deficits of -10.7% of GDP in 2014. SCPR estimates a deficit close to 20% during 2013 and 2014 and almost doubles its estimates to 35.7% and 40.5% after adding off-budget subsidies. SCPR projects foreign debt increased tenfold from 7% of GDP in 2010 to 71% at end-2014, whereas domestic debt increased from 16 to 76% of GDP. This implies a total debt of 147% of GDP by end-2014. Meanwhile EIU estimates external debt in 2014 at a much lower 40% of GDP.
The conflict has resulted in a trend of large current account deficits and a depreciating exchange rate. Depressed export revenue due to the impact of conflict (declining output and sanctions), and declining international reserves have caused a significant depreciation of the Syrian pound from 47 pounds per USD (March 2011) to an estimated 176 pounds per USD (end-2014) (EIU).
Prior to the crisis, Syria’s economic reform efforts had helped strengthen growth, although external and domestic shocks, and particularly the impact of the global financial crisis and prolonged droughts, had adversely affected the country’s macroeconomic performance.
Despite accelerating economic growth over the last decade, this pre-conflict growth had not been inclusive. It had not led to significant job creation or to poverty reduction. Rural society became increasingly marginalized and suffered from severe shocks related to both economic transition and drought. This was especially severe in the east, consequently spurring internal migration to larger regional cities and the Damascus suburbs.
Syria’s GDP had remained dependent on the oil and agriculture sectors, themselves subject to fluctuating oil prices and rainfall. Main sources of foreign earnings were oil exports, exports of services, and foreign transfers of income and remittances; however these sources are now seriously curtailed by the crisis.
Once the situation stabilizes, Syria will have to grapple with immediate economic challenges. It will also need to support the return of internally displaced people and refugees in neighboring countries, rebuild the country’s infrastructure, enhance the provision of public services including health and education, and rebuild the social fabric of the country.
Last Updated: Mar 01, 2015