Outlook
Macroeconomic and poverty projections are complicated by the uncertainty about the duration and severity of the conflict. Nevertheless, real GDP is estimated to continue to contract in 2016 by around 4% on account of a worsening of the conflict in key centers of economic activity such as Aleppo and as oil and gas production and non-oil economic activity continue to suffer from the conflict. Inflation is likely to remain very high at around 25% in 2016, because of continued exchange rate depreciation, trade disruptions, and shortages. Current account and fiscal deficits are also projected to remain large, broadly around the levels of 2015. Medium-term macroeconomic prospects hinge on containing the war and finding a political resolution to the conflict, and rebuilding the damaged infrastructure and social capital.
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