Syria’s 2025 budget prioritizes fiscal stability over social support despite a worsening humanitarian crisis and an increasing number of returnees.

Last month, the Damascus government unveiled Syria’s 2025 budget allocations, signaling a focus on fiscal stability amid limited resources and rising public needs. A further shift away from social obligations, combined with recent statements from President Assad, suggests a long-term strategy of stabilizing state finances over immediate relief.

The 2025 budget may appear substantial at SYP 52.6 trillion, up 48% from 2024, but don’t be misled; this increase reflects the Syrian pound’s steep depreciation. Assuming inflation and black-market rates follow recent trends, the actual purchasing power of this budget could be less than last year’s. Calculations show an 88.5% decrease in real terms (inflation-adjusted) compared to 2010, a year before the conflict. In nominal USD terms, the budget has shrunk by 86%.

The government proposes allocating 30% of spending to capital expenditures, up from 25% in 2024. These funds should, in principle, support production and future growth. However, in real terms, the capital budget remains marginal.

 Revenue from sources such as taxes, fees, and phosphate exports is expected to cover 79% of spending, leaving a 21% deficit. The projected deficit reduction from 26% to 21% in 2025 suggests the government’s focus on inflation control and fiscal stability over expanding spending to meet immediate needs. The deficit, codified as “exceptional revenues,” consists of loans and external resources, internal loans or treasury bills, and the “intake from reserves”—essentially money printing, a driver of persistent inflation despite stabilizing economic activity.

How can the state justify shrinking spending amid a worsening humanitarian crisis, exacerbated by returning Syrians and Lebanese nationals? By reducing subsidies, even for “red line” essentials like bread, and distancing itself from social support.

While the Assad regime continues flirting with some European and regional countries, its economic policies suggest a sustained commitment to fiscal stability despite mounting challenges. This may indicate an expectation that the status quo is likely to endure. Refusing any political compromise that could aid recovery, Assad advised his cabinet in September, “Don’t over-promise [...] be realistic.”