“Triple Shock” and the Syrian Economy: Can Damascus Withstand the New Wave of Global Pressure?
A new tide of economic anxiety is sweeping through Damascus. The region’s escalating tensions have created a climate in which global markets are strained, supply chains are unsettled, and fragile economies stand exposed. Syria, already burdened by years of structural erosion, now confronts the consequences of what international institutions describe as a Triple Shock: surging energy prices, rising food costs, and weakening global growth. The question that shadows every discussion in the capital is whether the economy can endure another external storm at a moment when its internal foundations remain so delicate.
The United Nations Development Programme warned this week that more than thirty-two million people worldwide may fall into poverty as a result of the Iranian war’s economic fallout. The agency noted that developing countries will bear the heaviest burden, especially as doubts persist over the durability of the ceasefire between the United States and Iran. According to the UNDP, the conflict is eroding development gains and reshaping the global economic landscape in ways that will not be easily reversed.
After modelling several scenarios, the UNDP concluded that the most severe outcome—six weeks of disrupted oil and gas production followed by eight months of elevated costs—could push more than thirty-two million people below the poverty line. The report relied on the World Bank’s upper-middle-income threshold of 8.30 dollars per person per day, and noted that wealthier nations possess greater capacity to absorb the shock. The Global South, by contrast, enters this crisis with limited fiscal space and heightened sovereign risk.
Sectors Under Strain
Energy markets reacted sharply during the first weeks of the Iranian war. The temporary closure of the Strait of Hormuz restricted the flow of oil and gas, tightening global supply and driving up prices. Fertilizer shipments were disrupted, maritime transport slowed, and warnings multiplied about a looming threat to food security in developing countries.
UNDP Administrator Alexander De Croo described the situation as a painful reversal of progress. Many of those now at risk of falling back into poverty are the same individuals who had only recently managed to escape it.
Syrian economist Dr. Jumaa Hijazi argues that the repercussions of the conflict extend far beyond the immediate shock. He describes a sequence of overlapping aftershocks that strike the economic structure from several directions at once. The first appears in the energy sector, where any disruption in supply reduces electricity generation and raises the cost of living.
Foreign trade, he added, represents another point of vulnerability. Complex transport routes, higher shipping fees, and rising insurance costs feed directly into commodity prices and market availability. Inflation accelerates as import costs rise, eroding household purchasing power and placing millions under growing pressure. In the monetary market, increased demand for foreign currency threatens further depreciation of the Syrian pound and greater volatility.
Investment in an Age of Uncertainty
According to Dr. Hijazi, the investment climate becomes increasingly fragile when geopolitical risks intensify. Capital hesitates, projects stall, and economic activity slows. Prolonged escalation could push the economy from stagnation into a more dangerous phase marked by rising unemployment and declining production.
He also noted that deteriorating economic conditions weaken prospects for refugee return. Some who have already returned may feel compelled to leave again. The future of the Syrian economy, he said, remains open to several paths: limited containment if tensions ease, or a deeper crisis if the conflict widens.
Hijazi stressed that the heaviest burden will fall on ordinary citizens. Syria’s structural imbalances are deep, and any additional shock threatens to worsen an already fragile humanitarian landscape. The UNDP’s findings, he argued, reveal a moment in which geopolitical pressures and economic vulnerabilities intersect to create a complex and unpredictable reality. In such an environment, flexible economic policies and far-reaching structural reforms become essential for any state seeking to withstand external shocks, especially one as fragile as Syria.
Direct Impact on the Region
The UNDP Administrator warned that even a ceasefire cannot undo the damage already inflicted. The head of the International Monetary Fund echoed this view, noting that the war’s effects may leave lasting scars on the global economy.
Businessman Faisal Al-Atri believes Syria lies within one of the regions most exposed to the crisis. He pointed to UNDP scenarios that forecast a regional GDP contraction of 5.2 to 8.7 percent, with total losses approaching 194 billion dollars. Such a decline would eliminate tens of thousands of jobs and drive up the prices of fuel, food, and medicine.
Al-Atri told Al-Thawra that disruptions in gas and electricity supply will intensify pressure on the Syrian economy at a time when structural weaknesses are already severe. Declining foreign investment and reduced aid from Gulf states will further limit the country’s ability to recover. He expects the crisis to deepen social hardship, with poverty rates potentially rising by five percent, meaning an additional three million Syrians could fall below the poverty line. Any influx of returnees from Lebanon or elsewhere would place additional strain on public services and infrastructure, heightening social tensions and widening economic disparities.
The Reform Imperative
In its report, released as global leaders convened in Washington for the IMF Spring Meetings, the UNDP called for a coordinated international response to support the most affected countries. The agency recommended targeted, temporary cash transfers to shield vulnerable households, estimating the cost at six billion dollars. De Croo noted that such interventions yield positive economic returns by preventing families from sliding back into poverty. Other measures could include temporary subsidies or vouchers for electricity and cooking gas.
Within this context, Al-Atri urged the adoption of a governance model grounded in competence and transparency, alongside urgent structural reforms. He highlighted the need to simplify investment procedures, grant exemptions for essential raw materials, and strengthen local production in agriculture and industry. Diversifying energy sources through renewable investments and expanding regional economic cooperation—regardless of political fluctuations—are also essential steps.
Al-Atri concluded that the crisis, despite its severity, may offer an opening to rebuild the Syrian economy on modern foundations if approached with a comprehensive and credible reform agenda.
This article was translated and edited by The Syrian Observer. The Syrian Observer has not verified the content of this story. Responsibility for the information and views set out in this article lies entirely with the author.
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