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05-08-12

Syria's economy to shrink by 14% in 2012: IIF

(MENAFN) A recent report by the Institute of International Finance expected Syria's economy to contract by 14 percent this year, from 6 percent last year, Arabian Business reported. The forecast came as the long going unrest against President Bashar Al-Assad took its toll on the country's industries and investments, in addition to sanctions which constrained the country's export capacity. The report said that tourism receipts are forecast to fall to 0.6 percent of gross domestic product (GDP) this year. Tourism receipts declined to 4 percent of GDP in 2011 from 11 percent in 2010. Foreign direct investment (FDI) have sharply fell to USD600 million last year, compared to USD1.5 billion in 2010, and is expected to further plummet to USD100 million this year, the report said An estimated USD10.5 billion has left the country since the uprising began in March 2011 or 21 percent of GDP, according to the report. The IIF report also predicted Syria's fiscal deficit to reach 14 percent of GDP in 2012 compared with 8 percent last year. The government expenditure has increased during the unrest, while tax revenue, oil receipts dropped. The report forecasted Syria's oil output to fall to 100,000 bpd this year from 130,000 bpd in 2011. The country's foreign exchange reserves will drop to USD1.1 billion this year, and might be drained in 2013 as the unrest continues to heavily cost the government.

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