Syria runs $1bn deficit as H1 spending soars

By the Editorial Team · Wednesday, September 2, 2026

Syria posted a $1 billion fiscal deficit in the first half of 2026 due to expenditures outpacing revenues, with public spending rising sharply driven by wage increases and inflationary pressures. The government expects stronger revenue streams in the second half supported by new oil and gas income, while preparing a 2027 budget focused on reforms and digitalization.

Syria recorded a fiscal deficit of approximately $1 billion in the first half of 2026 as public expenditures outpaced government revenues, according to the latest budget performance report from the Finance Ministry. During this period, Syria’s public revenue reached about $2.7 billion, while spending climbed to around $3.7 billion, Finance Minister Mohammed Baniich stated.

The government achieved roughly 31 percent of its estimated annual revenue target and executed 35 percent of the approved expenditure by midyear. These figures suggest that the full-year revenue and expenditure estimates stand at approximately $8.7 billion and $10.6 billion, respectively. Compared with the first half of 2025, revenue grew by about 111 percent, but spending increased much more sharply, by approximately 331 percent.

The ministry attributed the surge in spending primarily to wage and salary increases, expanded outlays to support government priorities, and rising costs for goods, services, and production inputs. These inflationary pressures have been influenced by regional developments and higher import prices. Minister Baniich noted that expenditures are expected to rise further in the second half of the year as the full effects of increased salaries take hold, and as project implementation and investment spending accelerate—particularly to aid areas affected by ongoing challenges.

Regarding fiscal resources, oil and gas revenues began flowing to the Finance Ministry in May, a development expected to bolster Treasury income. Alongside improved tax and customs collections and some exceptional revenues, this should help strengthen public finances in the latter half of 2026.

The International Monetary Fund (IMF) recently reported that Syria’s central government budget closed 2025 with a small surplus after limiting expenditure to available resources and prioritizing essential needs. The fund anticipates a substantial revenue increase in 2026, driven by stronger tax and customs collections, rising hydrocarbon income, and one-off revenues from telecommunications licenses and fuel transit fees. However, the IMF also cautioned that financing constraints may force the government to curtail capital spending and called for enhanced oversight of off-budget operations, quasi-fiscal activities, and contingent liabilities. It emphasized the need for tax reforms and improvements in tax and customs administration.

Syria’s Finance Ministry is currently preparing the 2027 budget, aiming to finalize the process before the end of the third quarter. Planned reforms include improvements to budget preparation, implementation, and increased digitalization.

In a separate development, the Syrian Sovereign Fund and the Emirati real estate developer Arada signed a joint-venture agreement for the New Damascus project. Valued at an estimated $7 billion gross development value, the initiative will span 4 million square meters west of Damascus and feature 11,000 homes along with hospitality, retail, educational, and healthcare facilities. The $7 billion figure reflects the project’s gross development value rather than direct government financing.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.