Country Report Syria May 2009

Outlook for 2009-10

• The president, Bashar al-Assad, is expected to remain in power in 2009-10 and, despite some tensions within the regime, there is no significant threat to his rule. Some limited domestic political reform is expected.
• Relations with the US are forecast to improve, albeit gradually, although any open Syrian interference in Lebanon would work against this and would also jeopardise recently restored relations with a number of leading Arab states.
• Although peace talks between Israel and Syria may resume with Binyamin Netanyahu, the new Israeli prime minister, it is unlikely that the Golan Heights will be returned to Syria within the forecast period.
• Syria's drive to increase investment and boost tourism will be undermined by the global economic downturn, with real GDP growth falling from 4.8% in 2008 to 2.6% in 2009, before recovering slightly to 3.6% in 2010.
• Inflation will decline sharply from its 2008 peak, to an average of 8.1% in 2009-10, as the global economic slowdown depresses commodity prices.
• The current-account deficit will widen to around US$1bn (1.8% of GDP) in 2009 and further to around US$1.1bn in 2010.

Monthly review

• The prime minister visited Iraq in April, the first visit to Iraq by such a senior Syrian official in 30 years. He signed agreements related to security and economic co-operation.
• The Muslim Brotherhood has withdrawn from the National Salvation Front, a coalition of exiled opposition forces, following with some other members of the Front over the Brotherhood's stance on the Gaza conflict.
• A cabinet reshuffle has replaced the heads of the interior, justice, health and local government ministries and created a minister of state for the environment.
• The government has abolished a quota system that permitted households to buy 1,000 litres/year of diesel at a heavily subsidised price. Instead, the basic price has been lowered. In 2008 fuel subsidies amounted to almost US$11bn.
• Two more firmsthe International Bank for Trade and Finance and Nama, an agricultural investment companyhave listed on the Damascus Securities Exchange. Market capitalisation is now S27bn, but trading is thin.
• The UAE's Emirates Telecommunications Corporation (Etisalat) has expressed an interest in bidding for Syria's third mobile-phone licence, although this will not be put out to tender until after a new telecoms law is issued.

Source: Country Report

This report covers the following industry codes:
SIC Code: 13;48
NAICS Code: 211;517