Syria's economy lies in tatters, says UK report

Syria's economy has contracted by more than 50 per cent in real terms since 2011, according to estimates in a report by UK-based think-tank Chatham House.

The biggest losses in output have been from the energy and manufacturing sectors, said the 31-page research paper.

The report, published on 23 June, also highlighted an 80 percent drop in value of the Syrian pound since the start of the conflict in March 2011, and an average inflation rate of 51 percent.

Charting economic developments in Syria in the four years since March 2011, when the conflict began, David Butter - the researcher, economist and author of the report - estimates the population has dropped from 21 million to about 17.5 million.

The fall is due to out-migration and the death of more than a quarter of a million Syrians, which has been the greatest cost of the conflict.

The death of more than a quarter of a million Syrians has been the greatest cost of the conflict.

"The conflict itself has created new economic realities, the starkest of which has been the displacement or death of more than half of the population," he argues.

The data used came from the Syrian government, the Syrian Commission on Financial Markets and Securities, and third parties, such as the UN Food and Agriculture Organisation (FAO) and Syria's trading partners - in particular Turkey.

The report also highlighted the emergence of a war economy due to the creation of autonomous economic spheres by the Islamic State, the Syrian Kurdish PYD and rebels in the north-west and south.

It argued that, as the conflict evolves and IS and anti-regime rebels continue to advance, new economic challenges will emerge. For example, the Syrian private sector has already been forced to shift operations away from areas of conflict to safer regions or to neighbouring countries such as Turkey.

In addition, aid from foreign actors such as the UN or supporters of each side in the conflict has had a significant impact on patterns of trade and public finance.

The report also argued that, despite receiving support from Iran the Assad government has been institutionally weakened. Iran has also set political and economic conditions for continuing to provide aid.

Increased poverty, a deterioration of health and education services, and soaring rates of unemployment pose an immense challenge for future attempts to rebuild the economy.