Syria’s finance minister said Wednesday economic growth in his country was expected to drop to around one percent because of unrest, and acknowledged EU sanctions could harm the economy.
“Now, it will be around one percent, because of the events ... maybe between one to two percent,” minister Mohammad Jleilati told reporters on the sidelines of an Arab ministerial meeting in Abu Dhabi when asked about economic growth.
He said the Syrian economy grew 5.5 percent in 2010, and expected the gross domestic product to grow by around three percent next year.
More than 2,200 people have been killed in Syria since mass protests erupted across the country in March, according to UN figures.
“The current circumstances, no doubt, have some negative impact on the economy. We hope to overcome it through reforms,” he said.
The regime of President Bashar al-Assad has promised to launch a wide range of reforms to appease pro-democracy protesters.
Jleilati pointed to economic sanctions as one of the forces expected to put pressure on the economy as they would reduce exports to Europe.
“Sanctions could impact exports ... Trade and industry will be affected because most exports go to Europe,” he told AFP.
The EU on Friday adopted a ban on crude oil imports, expected to hit hard at Damascus as the EU buys 95 percent of Syria’s oil exports, providing a third of the regime’s hard currency earnings.
The bloc has not excluded further sanctions.
The EU, which had already frozen the assets of and imposed travel bans on 50 people and eight businesses and organizations, has added four Syrian businessmen accused of bankrolling the regime and three businesses to its list.
It has also had an arms embargo in place since May 9.
The Syrian top official, however, downplayed the impact of sanctions on the oil industry.
“Seventy percent of Syria’s oil is refined in Syria. What is left is exported to friendly countries,” he told AFP.
Syria produces 387,000 barrels per day of oil and exports around 110,000 bpd.
Syria is expected to easily find new destinations for its oil exports banned from Europe as energy-hungry nations, such as China and India, could jump on the chance to buy the available crude.
In other sectors, Jleilati said that tourism has been negatively impacted by “media exaggeration” claiming that hotel occupancy has dropped, but only to around 40 to 50 percent, thanks to domestic tourism.
“Internal tourism is still functioning,” he said.