Oil exploration and production, bumper agricultural harvests, increased private investment, and large post-Gulf War aid flows provided the impetus to Syria's growth spurt in the early 90s. A liquidity problem originating with the collapse of several private financiers in Aleppo continues to stifle both consumer demand and private investment activity. Recent delays in the Middle East peace process have undermined investor confidence. Looking ahead, the prognosis for 1997 remains uncertain.
Electricity supplies continue to improve, encouraging industrial productivity gains.
The trade deficit, which has grown in recent years, may fall. According to trade sources, the number of import permits issued thus far in 1997 is significantly lower than the same period last year, while exports may improve if higher oil prices offset production declines. Moreover, in 1996, the government slightly devalued the currency and initiated bank reforms that expanded access to foreign currency accounts. Syrian agriculture, highly productive in its own right, will continue to provide inexpensive raw materials to these industries. High growth potential also exists for the fertilizer, insecticide, and chemical manufacturing industries.