The expansionary fiscal policy adopted in 2000 and a steady growth in global non-oil commodity prices will lead to upward pressure on prices. But fairly weak Syrian growth and the low level of capacity utilization will ensure inflationary pressures remain in check, The Economist Intelligence Unit (EIU) reported.
EIU expected inflation to rise to 1.7 percent in 2001, up from 0.5 percent in 2000, increasing further to 2.3 percent in 2002 as prices of imported industrial raw materials increase further, and government spending cascades down to private consumption.
The EIU also reports that the government has begun reforming the exchange-rate regime with the introduction of a free-market rate for limited transactions of S£50.2:US$1.
The black-market rate has been stable in recent years, the report adds, remaining close to S£50:US$1. Attempts will be made to replace the neighboring countries rate of S£46.3:US$1 with the free-market rate. But the multiple fixed exchange-rate regime will not be abolished over the forecast period, concludes EIU – Albawaba.com
