Damascus: The International Monetary Fund (IMF) said Monday that Syria's economy is showing signs of recovery and improving prospects, reflecting the improvement in consumer and investor sentiment. This is due to Syrian authorities' ability to adopt a tight fiscal and monetary stance within the many constraints they face, with a view to ensuring economic and financial stability, the IMF said in a press release. According to Kuwait News Agency, fiscal discussions have focused on the formulation of the 2026 government budget, which aims to increase fiscal space for meeting essential needs, including for social sectors to support the most vulnerable. This approach is to be based on ambitious but realistic revenue and financing assumptions. IMF staff will offer extensive technical assistance to strengthen the fiscal framework by helping to improve public financial management and revenue administration, finalize new tax legislation, and develop a strategy to address Syria's legacy debts and strengthen debt mana gement. It is important that the new tax regime is simple, competitive, and easy to administer, while avoiding generous exemptions that could lead to arbitration and avoidance. The IMF also emphasized the importance of adhering to good governance standards as Syrian authorities restructure state-owned enterprises and engage in large investment projects with the private sector. It is crucial that the Ministry of Finance plays a key role in assessing and controlling potential contingent liabilities. Furthermore, the IMF staff initiated discussions on developing an appropriate monetary policy framework aimed at ensuring low and stable inflation, considering the current challenges in the financial system. In this regard, technical assistance will be provided to the Syrian authorities to formulate new financial sector legislation and regulation, rehabilitate the payment and banking systems, and rebuild capacity at the central bank to effectively implement monetary policy and supervise the financial system. The IMF mission reaffirmed its commitment to support the Syrian authorities in their efforts to rehabilitate the country's economy and key economic institutions.
