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Syria gov’t vows to maintain living standard despite unprecedented budget deficit

23 October 2012 23:55 (UTC +04:00)

Baku-APA. The Syrian government vowed to improve the citizens’ living conditions despite the harsh economic conditions the country is passing through and the large budget deficit that has been unprecedented over the past five year, APA reports.

The Ministry of Finance has recently prepared its financial report for the state’s general budget of 2013 that has showed a large deficit by around 68 percent over the previous year. The Syrian Cabinet is scheduled to discuss the draft budget soon.

Tishrin newspaper said Tuesday that the government financial statement over the 2013 budget has addressed the negative effects as a result of the economic sanctions imposed on Syria, which caused an overall economic structural imbalance involving the exchange rate, inflation, budget deficits, and the low rate of economic growth.

It is apparent that the economic sanctions have overshadowed the state budget through the sharp decline in public revenues as current revenues diminished by 22 percent when compared with those of 2011.

The economic sanctions that have been imposed on the country by most world countries to accelerate the collapse of the Syrian administration have enormously squeezed the Syrian economy. Businesses are going down the drain, and inflation broke the record by reaching 37 percent last month.

In mid-October, the European Union (EU) introduced a new set of economic sanctions against Syria, whose government has defiantly announced that it allocated billions of pounds to compensate for damages caused by the crisis to private properties.

The EU has recently agreed to impose assets freeze and travel ban on 28 Syrians and two firms at a meeting of EU foreign ministers, bringing to 181 the number of individuals and to 54 the number of companies blacklisted by EU countries.

The financial statement showed that the investment revenues are on the wane and have decreased by 40 percent as a result of the siege imposed on the oil sector as well as a halt in the wheel of production in many economic institutions and companies, which has a negative impact on the state budget and led to a rise in the budget deficit significantly.

In the 2013 budget, the state’s contribution in fixing prices under the term of the social subsidy has increased from 386 billion Syrian pounds (5.6 billion U.S. dollars) in the budget of 2012 to 512 billion (7.4 billion dollars) in the new budget.

The report indicated that the government’s subsidy of oil derivatives has been upped to 147 billion pounds (2.1 billion dollars), compared to 35 billion pounds (507 million dollars) in the previous year.

The crisis also caused widespread fuel shortages. Supplies of diesel and cooking gas were running short because of the sanctions.

However, the oil ministry stressed that the problem of cooking gas has been settled and assured the Syrians that there would be no shortage in diesel during winter where most Syrians use it for heating.

The government has earmarked 275 billion pounds (4 billion dollars) for investment in the 2013 budget, compared to 375 billion pounds (5.4 billion dollars) in the 2012 budget -- a decrease owing to focus on top priorities projects.

Special attention has been given to vital projects like electricity and the water resources sectors.

The financial statement also showed a crystal-clear increase in the budget deficit during the past five years, noting that the deficit was estimated at 167.49 billion pounds (2.4 billion dollars) in 2012 and has amounted to 528.93 billion pounds (7.6 billion dollars) in 2013.

Deputy Prime Minister for Economic Affairs Qadri Jamil stressed that the government is now focusing on urgent issues and is trying to regain the trust of the citizens.

He said during a meeting with Members of the General Council of the General Federation of Trade Unions on Monday that the government is working hectically to preserve the purchasing power of the Syrian pound and reduce any further drop in its value.

The pound has lost 50 percent of its value over the past 19 months. Recently and within a week, the U.S. dollar is sold at 75 pounds, up from 71 pounds.

Despite the government’s intervention to preserve the value of the pound at the black market, the pound is still deteriorating, sending dim signals about the economic conditions in the country and raised uncertainties about the government’s ability to handle the worsening conditions.