Despite inflation rising to between 17 and 20 per cent in mid-2008 – from 5 per cent in 2007 – declining international food and fuel prices in the fourth quarter of 2008 helped to reduce the figure to an estimated 15 per cent for the year.

The Article IV consultation report says that the global credit crisis will have a relatively mild effect on the Syrian economy in the short-term, through weakening foreign direct investment (FDI), but the longer-term outlook is positive, provided fiscal reforms and diversification policies are adhered to.

The IMF also encouraged Syria to follow through with plans to introduce value added tax (VAT) by 2010.