Syria’s trade deficit rises with sharp decline in exports: studySouce:Xinhua Publish By Thomas Whittle Updated 09/04/2013 1:14 pm in World / no comments
DAMASCUS, April 8 — Syria’s trade deficit was 16.1 percent in 2012, up from 8.1 percent in 2011, with exports reaching the lowest level in decades, a recent study said Monday.
The study, carried out by the commission for developing and promoting exports, was published in Syria’s al-Watan newspaper, amid reports that nearly one-quarter of the Syrian people are under the poverty line.
The study reveals that the trade balance has seen significant fluctuations in the past three years due to significant downturn of exported commodity’s earnings following the recession in the global economy.
It added that the trade balance’s deficit also attributed to the decline in the imported commodities due to the economic slowdown, the decline in world prices as well as the profound impact of economic sanctions on Syria.
The study said these factors have led to a depreciation of the Syrian pound and affected the people’s living conditions, adding that with the start of the crisis in mid March 2011, the Syrian pound started plunging and the U.S. dollar’s exchange rate against the Syrian pound was sold at 67.48 pounds in 2012 due to the world economic sanctions.
It said that the exchange rate of the dollar is still heading upward — now standing at 115 Syrian pounds in the black market — and noted that the impact of the exchange rate is very large on the prices of consumer items.
The study called for the need to rehabilitate the Syrian economy to face the challenges posed by international economic pressures, indicating that the Syrian economy is capable to grow and compete in international markets.
The study underscored the need to develop a national strategy for foreign trade characterized by inclusiveness and integration with national policies so that it works to recruit trade policy toward a greater contribution to enhancing the competitiveness of the national economy as well as to expanding the base of trading partners to improve the people’s living conditions.
About 5 million Syrian citizen entered below the poverty line on the background of the crisis raging in Syria, said Abdullah al- Dardari, head of the Office of the United Nations Economic and Social Commission for Western Asia (ESCWA).
According to the study, the consumer commodities’ imports have increased by 192 percent and raw materials decreased by 22 percent in 2012.
The study said that the imports’ increase has trigged off a continued rise in the rate of inflation, which recently stood at nearly 50 percent, adding that the economic sanctions have made it difficult to import some commodities and declined the competitive capacity.
It showed that the exports of raw materials have increased in 2012 by 10 percent over that of the previous year, and exports of manufactured items declined by 18.8 percent “due to the continued repercussions of the crisis and the negative impact of the economic sanctions.”
Imports of raw materials declined by 22 percent between 2011- 2012 also because of the economic sanctions, the study said, adding that the sanctions hindered oil derivatives’ imports, “a matter which has negatively affected the citizens’ living conditions and reduced domestic output.”
The study indicated that Syria imported only the basic needs of the people from manufactured commodities as the prices of semi- manufactured imports were high.
It reported a low proportion of imported consumer goods by 12 percent in 2011 out of the total imports, as a result of the government’s trade policy which aimed to reduce the gap of the deficit in the trade balance by seeking to reduce imports of luxury goods and consumer goods.
The percentage of consumer goods’ imports increased in 2012 by 192 percent compared with the imports of 2011 to meet the basic needs of the citizens, the study said, referring to a significant decline in the share of the Arab States of the Syrian exports by 19 percent in 2012, a decrease of 52 percent over that of 2011, as a result of sanctions imposed by most member states of the Arab League on Syria, which stopped all financial transactions and trade agreements with Syria.
The Syrian exports to European countries also plunged in 2012 to 2.75 percent, a decline of 93 percent over that of 2011, due to the economic sanctions, mainly on oil exports.
However, the study said, the positive developments in the international oil market last year led to an increase in the value of total exports to Asian countries to reach the highest level of 53.8 percent and an increase of 45.2 percent over that of 2011.
Iraq ranked first among the key partners of the Syrian exports in 2011 with a percentage of 18.12 percent of the total Syrian exports, and Italy ranked second with 12.5 percent, followed by Germany with 11 percent.
Syrian imports from Arab states also declined in 2012 by 11 percent, a decrease of 19 percent compared with 2011, and the Arab States’ imports from Syria declined significantly in 2012 to reach 16 percent, a decrease of 42.9 percent over that of 2011.
Asian countries ranked first on the list of countries that import from Syria by 44 percent last year, an increase of 36 percent compared to 2011, and European countries were the second by 17 percent.