The economic committee of the Syrian regime’s government has decided to raise the exchange rate of the dollar against the Syrian pound by about two thousand Syrian pounds in the state’s general budget for the year 2025.
According to the discussions conducted by the committee to finalize the budget figures, it decided to increase the exchange rate from 11,500 Syrian pounds per dollar (the rate used in the 2024 budget) to 13,500 Syrian pounds in 2025, marking an increase of about 17%, as reported by the official Syrian Arab News Agency (SANA) on Wednesday, October 2.
During the first meeting of the committee following its recent reformation after the new government’s assumption, there was talk about increasing the investment allocations for ministries and public entities from 6,800 billion pounds in 2024 to approximately 11,100 billion pounds in 2025, with an increase rate of around 63%.
Criticism of budget logic
In the first session held by the Syrian regime’s government after the new ministers took office last Tuesday, Finance Minister Riad Abd al-Raouf criticized the inappropriate financial policy direction in recent years.
This policy consisted of reducing the value and proportion of investment spending in favor of current spending, pointing out that the state’s general budget for 2025 will work on increasing the value and proportion of investment allocations, ensuring the activation of the production process.
For the year 2024, the budget allocations were set at a total amount of 35,500 billion Syrian pounds, representing an increase in Syrian pounds but a decline in value by 48.6%.
The budget was then distributed with 26,500 billion pounds for current spending and 9,000 billion pounds for investment spending, with the deficit amounting to 9,404 billion pounds.
A budget deficit occurs when expenditures exceed revenues during a specified period, wherein individual or government spending surpasses the available revenues.
The accumulated government deficit at the national level forms the national debt. To address this situation, some expenditures are reduced or efforts are made to increase income-generating activities.
A deficit results in economic growth slowdown, increased tax revenues, and higher unemployment rates.
Each year, the value of the general budget allocations in Syrian pounds increases, yet it decreases when measured in US dollars.