Country Report Syria December 2008

Summary

The president, Bashar al-Assad, is expected to remain in power in 2009-10 and there is no significant threat to his rule. However, there will be ongoing tensions within the ruling elite, exacerbated by external pressures.
Mr Assad will continue the push to reduce Syria's political isolation, but any open interference in Lebanon would work against this, alienating new interlocutors such as France's president, Nicolas Sarkozy.
There is unlikely to be progress on negotiations with Israel, owing to a lack of public and parliamentary support in Israel for returning the occupied Golan Heights to Syria and the forthcoming Israeli elections in February 2009.
Syria's drive to increase investment and boost tourism will be affected by the global economic slowdown, with real GDP growth falling from 4.8% in 2008 to 3.6% in 2009, and recovering slightly to 4.1% in 2010.
Inflation will decline sharply from its 2008 peak, averaging 7.2% in 2009 and 8.4% in 2010, as the global slowdown depresses global commodity prices.
The current-account deficit will widen in 2009, to around US$1.2bn (2.1% of GDP), increasing to US$1.4bn in 2010.

Syria aired the confessions of 11 people allegedly involved in the September bombing in Damascus, identified as members of Fatah al-Islam, an Islamist group, who said they received funding from the Lebanese Future Movement.
The British foreign secretary, David Miliband, visited Syria, which he said had played a role in reducing violence in Iraq. This contrasted with the head of the US mission in Damascus, who said that Syria was a safe haven for terrorists.
An initial, but as yet inconclusive, International Atomic Energy Agency report has found evidence, including traces of uranium, that could be consistent with the allegation that Syria had been building a nuclear reactor at Al Kibar.
The draft budget for 2009 envisages a deficit of S226bn, or 10% of GDP. Meanwhile the budget outturn for 2007 showed an underspend and higher than budgeted revenue, resulting in a smaller than planned 2% deficit.
The finance minister, Mohammed al-Hussein, has confirmed that plans to introduce a value-added tax have been delayed by at least a year, apparently to ensure proper billing systems are in place.
Preliminary results from the IMF's annual Article IV consultation show a weaker economic performance than government figures.
Gulfsands has made a fresh oil discovery, 3km from its Khurbet East field.

Source: Country Report

This report covers the following industry codes:
SIC Code: 60
NAICS Code: 52