Sanctions threaten double-digit drop in Syrian GDP

The Arab League’s decision to suspend Syria’s membership paves the way for harsher economic and political sanctions that should weaken President Bashar Al-Assad’s leadership. Admittedly, Iraq, Yemen and Lebanon, which combined account for over 40% of Syrian exports, have not supported the other Arab countries. This could help to cushion some of the impact of sanctions. But we don’t think that this will be enough to prevent a significant deterioration in economic activity. Although much remains uncertain, the country’s GDP could shrink by over 10% in the next 12 months.