IMF expects Syria’s economy to grow at double-digit pace in 2026

Syria’s economy is expected to grow at a double-digit rate in 2026 and maintain strong momentum next year, the International Monetary Fund (IMF) said Tuesday.

It warned that poverty remains widespread and the recovery is uneven across regions.

An IMF staff team visited Damascus on July 19-23 to assess economic conditions, discuss reform progress and policy priorities, and agree on further technical assistance.

“Syria’s economic recovery is accelerating,” mission chief Ron van Rooden said after the visit.

The IMF said the economy began recovering in 2025 as consumer and investor confidence improved following the regime change. Around 1.5 million refugees returned, and Syria gradually reintegrated into the regional and global economy.

Growth this year is being supported by improved rainfall and a rebound in agriculture, as well as expanding hydrocarbon production, electricity provision, trade and services. Economic activity is also benefiting from continued refugee returns, a rise in visitor numbers and higher government spending.

The Fund said, however, that poverty, although somewhat reduced, remains widespread.

Inflation, which slowed to low double-digit levels in 2025, has accelerated significantly in 2026 due to higher fuel and food import prices linked to the regional conflict, strong domestic demand and rising housing costs.

Public-sector wage increases and higher utility prices have also contributed to inflation, said the IMF, adding that price pressures could ease in 2027 if import costs decline and sound fiscal and monetary policies are maintained.

Syria’s central government recorded a small budget surplus in 2025 after limiting spending to available resources and prioritizing essential needs.

Revenues are expected to increase substantially in 2026, supported by stronger tax and customs collections, higher hydrocarbon income and one-off proceeds from telecommunications licenses and fuel transit fees.

The IMF urged continued fiscal discipline, stronger public financial management, improved revenue collection and tighter oversight of off-budget operations and government liabilities.

It said Syria requires sustained international financial support to address its humanitarian and development needs, including rebuilding infrastructure, housing and public services and creating employment for returning refugees and internally displaced people.

The Fund warned that monetary policy remains severely constrained by a “highly dysfunctional” banking system and urged authorities to accelerate banking-sector rehabilitation, introduce new central bank and banking laws and strengthen financial supervision.

The IMF and Syrian authorities agreed on a technical assistance program covering fiscal management, taxation, debt management, banking reform, monetary policy, anti-money laundering safeguards and economic statistics.