Syrian President Bashar al-Assad's is unlikely to regain full control of the country, but has consolidated his control across a belt of territory stretching from the port cities of Tartous and Latakia in north-western Syria, through Homs in the centre of the country to the capital Damascus in the south-west. Jihadist group Islamic State (IS) has gained significant ground since 2014, and currently holds approximately a third of the country's territory.
Our core scenario sees the civil war continuing for many years, ending in a partition of Syria along sectarian lines - either as the outcome of a negotiated settlement between the warring parties, or through an extended stalemate and de facto break-up of the country. An outright victory by either the Assad regime (actively backed by Iran, Russia, and Lebanese Shi'a militant group Hizbullah), or the disparate coalition of rebels aligned against it, appears less probable at this stage.
By the end of 2016, we expect the Syrian economy to shrink to the size it was in the early-1990s. While regions held by the regime of Syrian President Bashar al-Assad will remain better-off than those occupied by the rebels, business activity and state investment will stay stagnant, and living standards will continue to decline as the Syrian pound loses value.
IS will remain resilient for at least the next one to two years, with the defeat of the group requiring both sufficient military force on the ground and a political solution which would satisfy Sunni grievances - both of which are even harder to contemplate in Syria than in Iraq, IS' other bastion.
We expect the push for Kurdish autonomy in north-eastern Syria to continue over the coming years, helped by the fragmentation of the country and the allure of the Kurdish People's Defence Unit (YPG) - a capable and largely secular force - to Western policymakers. Yet the Kurds' ability to form a sustainable autonomous state along the Syrian-Turkish border will face significant challenges.
|Real GDP growth, % y-o-y||-20.6||-17.0||-11.7||-8.5|
|Nominal GDP, USDbn||43.5||35.7||26.9||29.2|
|Consumer price inflation, % y-o-y, eop||88.3||16.9||40.0||32.0|
|Exchange rate SYP/USD, eop||141.80||180.29||270.00||290.00|
|Budget balance, % of GDP||-8.8||-6.6||-5.5||-4.6|
|Current account balance, % of GDP||-14.6||-3.6||-3.0||-2.3|
The Lebanon and Syria Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Syria, Lebanon. It is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.
An influential new analysis of Syria, Lebanon's economic, political and financial prospects through end-2019, just published by award-winning forecasters, BMI Research.
- Forecast the pace and stability of Syria, Lebanon's economic and industry growth through end-2019.
- Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
- Assess the critical shortcomings of the operating environment that pose hidden barriers and costs to corporate profitability.
- Contextualise Syria, Lebanon's country risks against regional peers using BMI's country comparative Risk Index system.
- Evaluate external threats to doing business in Syria, Lebanon, including currency volatility, the commodity price boom and protectionist policies.
BMI provides our fully independent 5-year forecasts for Syria, Lebanon through end-2019 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.
Economic Outlook Contents
The Lebanon and Syria Country Risk Report features BMI's forecasts with supporting analysis for 2015 through to end-2019, set against government views and BMI's evaluation of global and regional prospects.
Key Areas Covered:
- Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
- BMI's comprehensive Risk Index system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.
- Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
- Balance of Payments - trade and investment, current and capital account.
- Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
- Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
- Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
- Foreign Direct Investment - approvals, inflows and climate.
- External Debt - debt profile (short and long-term plus public and private sector obligations).
- Global Assumptions - forecasts for each year to end-2019 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.
- Rely upon BMI's 100% independent forecast scenarios for Syria, Lebanon and underlying assumptions - we take no advertising and are privately-owned.
- Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Syria, Lebanon, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
- Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.
What are the political risks to doing business in Syria, Lebanon over the next 5-years?
BMI's Syria, Lebanon country Risk Index evaluates the short- and medium-term threats to political stability.
Political Outlook Contents
- SWOT Analysis for the Syria, Lebanon Market - Political Strengths, Weaknesses, Opportunities and Threats facing Syria, Lebanon.
- Political Stability and Risk Assessment - BMI's Risk Index assesses explicit short- and long-term risks to political stability; latest positioning and trends for Syria, Lebanon's risk are compared with regional and global averages.
- Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.
- Long-Term Political Outlook BMI examines the structural risks to the stability of Syria, Lebanon’s political system and the dominant public policy issues likely to affect decision-makers, and outlines scenarios for how the state could evolve in the medium to long term.
- Benchmark Syria, Lebanon's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
- Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
- Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.
What are the current operational risks and difficulties associated with doing business in Syria, Lebanon?
The Operational Risk section gives an evaluation of current risks and difficulties associated with operating in the market. It also provides a brief overview of the regional Operational Risk Index which benchmarks Syria, Lebanon against its neighbours.
Operational Risk Contents
The chapter provides a summary of the main threats in the country, within:
- Labour Market Risk (Education; Availability of Labour; and Labour Costs)
- Logistics Risk (Market Size and Utilities; Quality and Extent of the Transport Governance)
- Trade and Investment Risk (Economic Openness; Government Intervention; and Legal Risks)
- Crime and Security Risk (Crime; Terrorism; and Interstate Conflict risks).
The report also drills down in greater depth to address key issues in one of the following segments most critical to the market:
- Transport network, economic openness, cost and availability of labour, crime risks, bureaucratic environment, market size and utilities, and interstate conflict.
- Assess your company’s exposure to country specific operational and business risks, using BMI’s insight on the current dangers of operating in the market.
- Evaluate Syria, Lebanon’s risk profile against its regional peers, helping you understand the market’s strengths and weaknesses in relation to other countries.