Report: Syria Conflict Triggers Cost of Living Surge

Consumer prices in Syria have jumped by up to two-thirds this year, driven by deteriorating security, increased transport costs and unfavorable exchange rates, a pro-regime daily reported Tuesday, citing a government economist.

"The (price) increase of foodstuffs and merchandise depends on the exchange rates and the cost of transportation and labor," Ziad Hazaa, director of economy and internal trade at the ministry of economy told al-Watan newspaper.

"The prices of all products have increased from between 35 and 65 percent since the beginning of the year," he said, adding that the authorities plan to ensure all citizens have "equal access" to essential goods such as bread and fuel.

Bread is subsidized in Syria while the price of fuel has been maintained at levels that existed before an anti-regime uprising erupted in March last year.

Government newspaper Tishrin meanwhile said all essential goods had been affected, including the garment sector, with the price of clothing almost doubling.

Citing traders, the newspaper attributed the price rise to "the closure of many factories due to the security situation, the increase in prices of raw materials and the economic sanctions" imposed on Syria by Western nations.

The transportation of goods in the war-ravaged country has become very difficult in light of "armed groups who cut off main routes and steal merchandise", Tishrin said.

August inflation in Syria rose 39.5 percent year-on-year, according to official statistics.

The annual survey by the Economic Intelligence Unit, published in July, estimated that Syria's GDP would fall by eight percent in 2012.

"Violence discourages consumption, investment and economic activity in general and this is added to the European sanctions, particularly on oil exports," it said.

A study by the International Finance Institute forecast that GDP would contract by between 14 and 20 percent in 2012 "due to a decline in agricultural production, dwindling investments and a decrease in exports due to the fighting and EU sanctions."

More than 40,000 people have been killed in Syria since the anti-regime uprising broke out last year, evolving into an armed insurgency after the authorities unleashed a brutal repression against protesters.