With a population of 18.9 million of which half are under the age of 20, Syria is located in the volatile Middle East neighboring Israel, Lebanon and Iraq all of which have experienced military conflict recently. Syria, formerly a socialist model economy is now in a modest transition to follow some market based principles with gradual liberalization although the government still maintains firm control over much of country’s economic affairs. Petroleum production and agriculture remain the mainstay of the Syrian economy with oil production accounting for upwards of two thirds of exports. Excessive red tape coupled with protectionist policies have also discouraged business innovation and foreign direct investment which ultimately results in a lower standard of living.
Total GDP as measured by purchasing power parity stands at $72.33 billion USD (2005) with corresponding GDP/Capita at $3,900 USD. GDP market stands at $25.8 billion USD (2005). GDP growth rates include year 2005 at 4.5 percent. Inflation quotes include year 1997 at 20 percent, 2004 at 2.1 percent, 2005 at 2.6 percent. The current account is presently in surplus at 5 percent of GDP (2005) with the trade component itself in surplus at $371 million USD (2005). Foreign exchange reserves including gold came in at $5.36 billion USD (2005). Unemployment for 2004 came in at 12.3 percent. Net energy exporter with proven oil reserves at 2.5 billion barrels with oil exports for 2004 at 285,000 bpd.
CURRENCY: ISO Symbol ‘SYP’, Syrian pound. At time of review on October 17, 2006, the Syrian pound had an exchange value of 52.21 SYP to the US-dollar (USD) and/or 65.427 SYP to the Euroland euro (EUR). The pound is presently pegged to the USD at 52.2 SYP. In July 2006, the Syrian authorities announced that they would be terminating the USD peg for the Syrian pound by year-end 2006. Syria has expanded its trade relationship with the Eurozone while already converting half of its currency reserves into the EUR currency. There is presently an official and parallel black market rate for the Syrian pound although the variance between the two rates are closing. Currency controls are in place for exports.
CURRENCY HISTORY: previously fixed at an official rate of 11.225 SYP to the USD. Historical exchange rate quotes include December 2005 at 58.4 SYP to the USD (black market rate), November 2005 at 56.6, year 2003 at 52.8, 2002 at 52.4, year 2001 at 50.4, 2000 at 46, 1998 at 48 and January 1997 at 41.9.
CURRENCY FORECAST: currency risk is heightened by regional instability, political issues with respect to Syria’s foreign policy particularly Syria’s foreign exchange earnings that it has garnered from Lebanon. Other currency risks include analysts projections that Syria may very well be a net importer of oil by year 2010 unless new discoveries are made. Future declines in oil production coupled with a figure of approximately 25 years left for oil reserves builds in a higher currency risk assessment at this current time.
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