DAMASCUS: Three weeks of political unrest are starting to take a toll on the Syrian economy, as consumers dash for dollars, investors hedge their bets and foreigners shelve holidays.
"The impact is still limited but as of two weeks ago, we have seen a drop in consumption of consumer goods because people prefer to limit themselves to what is strictly necessary," a Syrian economist told AFP.
Growth in Syria hovers at about 5 percent and is mainly driven by consumption and real estate, a sector which has already showing signs of stagnation after a dizzying price hike in recent years.
"Businessmen in Syria are reluctant to increase their investments and those who are abroad are waiting to see how things out," added the academic, who refused to be identified.
This attitude bodes ill for a country that in 2011 earmarked $100 billion dollars for its 11th five-year plan, of which half is supposed to be financed by the private sector.
The Syrian pound, meanwhile, has lost 3% of its value against the US dollar since an opposition movement calling for greater freedom and political reforms erupted mid-March, challenging a regime entrenched in power since 1963.
The Damascus Securities Exchange, which works four days a week and has only 20 titles, mainly banks and insurance companies with a modest capitalization of 2.84 billion, saw its index fall and transactions slow down raising concerns.
"The market this week reached half the usual amount of transactions," Al-Watan, a privately-owned daily close to the government, said Tuesday.
The Damascus Securities Exchange slipped 5.96 points between Sunday and Monday, after dropping 28.62 points Thursday. It stood at 1,538 at the start of the protests and closed on Monday at 1,446.
Tourism, which in 2010 accounted for 12 percent of Syria's GPD with revenues of $6.5 billion, employing 11 percent of the workforce, has also been hit hard.
"We had expected an exceptional year but now we are at a standstill. Cancellations began during the unrest in Egypt and Jordan but the phenomenon picked up speed when it reached us," a tourist operator in Damascus told AFP.
"This time of year you had to beg to get a hotel reservation, now it is the hotels who are begging for us to send them customers," he said, adding that the occupancy rate in hotels does not exceed 40%.
The US State Department on Sunday issued a travel warning urging its citizens to defer non-essential travel to Syria for the time being due to ongoing political and civil unrest.
The Organization for Economic Co-operation and Development (OECD) last week downgraded Syria's "country risk" rating from 6 to 7, which makes investors even more reluctant to inject their money into a nation that had pinned its hopes on a more open economy.
A European economist told AFP: "This challenge comes at a particularly bad time economically because the country was starting to take-off after years of stagnation."
But as the government daily Tishreen observed on Monday: "Even if economic reform is to the government's credit, it is useful to recall that the process of political reform has lagged behind."