Minister of Finance Muhammad Barnieh announced recent salary increases are fully funded through domestic resources, reaffirming the government’s commitment to transparency through the publication of the 2025 fiscal results. The data showed a modest surplus of $46 million, marking the first surplus recorded in years.
Domestic Revenue Structure
According to official figures, around 60% of state revenues were generated from taxes and customs duties, with additional contributions from state assets and investment activities. Oil revenues remained limited, reflecting the continued constraints on the sector.
Foreign aid played a relatively minor role, totaling no more than $40–45 million. However, external wage support from Qatar and Saudi Arabia, estimated at $86–87 million, supplemented public spending, although these funds were not channeled through the state treasury.
2026 Budget and Growth Targets
The government is preparing for a significant fiscal expansion, with the 2026 budget projected at $10.5 billion, compared to roughly $2 billion in 2024. Public spending rose to $3.5 billion in 2025, alongside reported economic growth of 30–35%, bringing GDP to an estimated $32 billion.
Authorities aim to increase GDP to between $60 and $65 billion, approaching pre-2011 levels. Approximately 40% of the 2026 budget is allocated to essential services, including health and education. The plan also prioritizes closing displacement camps and rehabilitating infrastructure, with domestic funding estimated at $3 billion.
Nominal Growth vs Structural Recovery
Economist Samer Rahaal cautioned these improvements reflect nominal growth rather than a full structural recovery. He noted that Syria’s productive base remains significantly weakened compared to pre-war levels.
The current budget represents around 16–18% of GDP, below global averages, but relatively high for an economy still in a fragile state. While the return of resource-rich areas, particularly in the Jazeera region (Raqqa, Hasakah and Deir Ezzor), has boosted revenues in sectors such as energy and agriculture, this progress remains insufficient to ensure long-term stability.
Reconstruction Pressures and Displacement
One of the most pressing challenges remains the resettlement of displaced populations. Housing alone could cost an estimated $5 billion, excluding infrastructure and services. This places significant pressure on public finances, potentially consuming nearly half of the national budget if fully implemented. With the government reluctant to rely on loans or external aid, financing options remain limited, especially given a narrow tax base and reduced oil production.
Rahaal warned that unbalanced spending could deepen regional inequalities. He proposed adopting a transparent allocation model based on levels of destruction and population density, ensuring that at least 25–30% of funds are directed toward resource-rich eastern regions.
He also recommended linking funding to phased implementation milestones to reduce inefficiencies, currently estimated to reach up to 40%, alongside publishing detailed expenditure data and establishing an independent reconstruction fund under strict oversight. Rahaal concluded the success of the 2026 budget should not be judged by its size alone, but by its ability to deliver balanced, tangible development across all regions of the country.
