Syria runs $1bn deficit as H1 spending soars

By the Editorial Team · Thursday, September 3, 2026

Syria reported a $1 billion fiscal deficit in the first half of 2026 due to government spending of $3.7 billion surpassing revenues of $2.7 billion, driven by higher wages, import costs, and investment outlays. The Finance Ministry expects spending to rise further in the second half, but new oil and gas revenues and improved tax collections could help stabilize the budget, while preparations for the 2027 budget include planned reforms and digitalization efforts.

Syria reported a fiscal deficit of approximately $1 billion in the first half of 2026 as government spending significantly outpaced revenue, driven by increased wages, rising import costs, and expanded investments. According to Finance Minister Mohammed Barniich’s budget performance report, public revenue for the period reached about $2.7 billion, while expenditures rose to $3.7 billion.

The government collected roughly 31 percent of its projected annual revenue but spent around 35 percent of its approved budget. These figures suggest full-year revenue and spending levels of approximately $8.7 billion and $10.6 billion, respectively. Compared with the first half of 2025, revenue nearly doubled, increasing by 111 percent, while government spending more than tripled, rising by 331 percent.

The rapid growth in expenditures was largely attributed to salary and wage increases, greater allocation of funds toward government priorities, and mounting costs for goods, services, and production inputs. These factors were influenced by regional developments and higher import prices. Barniich noted that spending is expected to rise further in the second half of 2026 as the full impact of wage adjustments takes effect and investments—particularly to support areas affected by conflict—intensify.

Starting in May, oil and gas revenues began contributing to the Finance Ministry’s resources, which, along with improved tax and customs collections and exceptional receipts, are anticipated to bolster the Treasury in the latter part of the year.

In August, the International Monetary Fund (IMF) reported that Syria’s central government budget ended 2025 with a small surplus, achieved by limiting expenditures to available resources and prioritizing essential needs. The IMF projects a substantial increase in revenue for 2026, supported by stronger tax and customs income, higher hydrocarbon revenues, and one-off funds from telecommunications licenses and fuel transit fees. However, the fund cautioned that financing limitations may force the government to restrain capital expenditures. It also emphasized the need for enhanced oversight of off-budget operations, quasi-fiscal activities, contingent liabilities, and recommended tax reforms alongside improvements to tax and customs administration.

Meanwhile, Syria’s Finance Ministry is preparing the 2027 budget, aiming to finalize it before the end of the third quarter. The ministry plans to introduce reforms in budget preparation, execution, and digitalization.

In a related development, the state-owned Syrian Sovereign Fund partnered with UAE-based developer Arada on a joint venture for the New Damascus project, valued at $7 billion. Encompassing an area of 4 million square meters west of Damascus, the development will include 11,000 residential units, hospitality and retail venues, schools, and healthcare facilities. The $7 billion figure represents the project’s estimated gross development value rather than a direct financial payment to the Syrian government.

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.