A Syrian state newspaper reported on Thursday that people are facing unprecedented problems buying basic necessities due to rampant inflation flared by a bloody 18-month-old conflict that has engulfed the whole country.
“In the last few months, the price of the most basic commodities has risen,” Tishrin newspaper said, adding that the population’s purchasing power had been reduced by a third.
The state newspaper quoted Mohammad Jumaa as saying that economic sanctions on Syria have brought about a reduction in products and services offered on the market, which, set against the high demand of consumers, has caused the price rise.
“Price rises for energy and transporting goods have also contributed,” he added, saying that July’s inflation rate had reached 32%.
According to official Syrian statistics, prices increased by 32.5% from May 2011 to May 2012, and 15.4% since the beginning of the year.
The Economist Intelligence Unit said in a report released in July that it expects Syria’s gross domestic product (GDP) to shrink by over 8% in 2012.
“Rising violence will depress consumer spending, investment and, more generally, domestic economic activity,” the leading international magazine’s report said.
“This is in addition to European sanctions, particularly on the export of oil,” the report added.
According the Institute of International Finance study, Syria’s real GDP would contract by between 14-20% in 2012 due to declining agriculture production, dwindling investment and a slump in exports.