Syria

Nearly 14 years of conflict in Syria have left a profound impact on the country, resulting in widespread devastation, an unprecedented humanitarian crisis, and one of the largest displacement crises in modern history. The conflict is estimated to have damaged nearly one-third of Syria's pre-conflict gross capital stock, with direct physical damage to infrastructure, residential buildings, and non-residential buildings estimated at $108 billion. Syria’s reconstruction costs are estimated at US$216 billion based on a rapid nationwide assessment of infrastructure and building assets from 2011 to 2024. The estimated physical reconstruction costs are nearly ten times Syria’s projected 2024 GDP, highlighting the scale of the challenge and the significant need for international support.

Today, Syria stands at a critical crossroads. Recent political transition and subsequent developments present an opportunity for the country to progress towards stabilization, address its people's needs, and initiate the reconstruction and recovery process.

However, the challenges ahead are substantial. A collective commitment and coordinated action are essential to implement a comprehensive support program that will help Syria restore vital infrastructure and services. This approach will lay the groundwork for a more resilient future for the people through sustainable recovery and long-term development.

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Syria shows steady signs of economic recovery as sanction relief, national reconciliation, accelerating refugee returns, improved electricity supply, major public-private investment, and substantial reconstruction needs are expected to lift growth.

While official data remains limited, and of uneven reliability, high frequency indicators point to an incipient economic recovery. Real GDP growth is expected to have strengthened in 2025, with estimates ranging between 2.0–4.0 percent. External connectivity improved markedly with notable increases in air and port traffic. In February 2026, the transitional government regained control of key oil and gas areas, significantly increasing its share of national oil production from around 20 to 88 percent. Since early 2025, Syria has advanced a broad reform agenda aimed at modernizing institutions and supporting economic stabilization and reconstruction.

Despite these gains, sectoral conditions remain uneven. Tourism investment has resumed, but arrivals remain well below pre-conflict levels. Agriculture, though benefiting from better 2026 rainfall, is still recovering from the sharp 2025 drought. The Syrian pound has been appreciating since December 2024, reflecting improved external conditions and policy reforms. Inflation has eased, estimated at 11.5 percent in 2025, down from 72.1 percent in 2024.

Subject to high uncertainty, economic activity is expected to continue modestly strengthening in 2026, weighted down by the conflict in the Middle East, which could reverse recent improvements by dampening trade, tourism, investment and electricity provision. Growth is expected to be still supported by recovering domestic demand from the return of refugees, higher public wages, increased business registration, and higher oil and gas output.

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Before the conflict, the World Bank provided Syria with technical assistance and advisory services across various sectors. Following the outbreak of conflict in 2011, all World Bank operations in Syria were halted. Despite this, the World Bank continued to monitor the effects of the conflict on the Syrian population, the economy, and neighboring countries. Since 2022, the World Bank has produced the Syria Economic Monitor, which updates key economic developments and policies.

With the political transition, there has been an increase in international engagement and support for Syria’s transitional government. Key regional players have begun to re-engage and provide technical and fiscal assistance. In May 2025, Saudi Arabia and Qatar cleared Syria's arrears to the International Development Association (IDA), reinstating Syria’s eligibility for World Bank funding after a 14-year suspension. This development paves the way for renewed development assistance. Additionally, easing sanctions by the EU, the UK, and the US signals a significant policy shift and a new phase in Syria’s re-engagement with the international community.

As Syria prepares for recovery and reconstruction, the World Bank has swiftly started updating its knowledge base on the country and engaged in policy dialogue with government authorities regarding priorities and partnerships.

Rehabilitating the electricity sector was identified as a critical investment which can significantly improve the living conditions of the Syrian people, support the return of refugees and internally displaced, enable the resumption of essential services, and help kickstart economic recovery. In June 2025, the World Bank approved its first project in Syria in nearly four decades: a US$146 million IDA grant to restore reliable and affordable electricity to support economic recovery. The Syria Emergency Electricity Project marks the first step in a planned increase in World Bank support for Syria on its path to recovery and development.

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