DAMASCUS: Inflation has slashed the purchasing power of ordinary Syrians by a third, 18 months after the country’s conflict broke out, a state newspaper reported Wednesday.

“In the last few months, the price of the most basic commodities has risen,” Tishrin newspaper said, adding that the population’s purchasing power had been reduced by a third.

Economic sanctions on Syria have brought about “a reduction in products and services offered on the market, which, set against the high demand of consumers, has caused the price rise,” Tishrin quoted economist Mohammad Jumaa as saying.

“Price rises for energy and transporting goods have also contributed,” he added, saying that July’s inflation rate had reached 32 percent.

Prices increased by 32.5 percent from May 2011 to May 2012, and 15.4 percent since the beginning of the year, according to official Syrian statistics.

The Economist Intelligence Unit said in a report released in July that it expects Syria’s gross domestic product to shrink by over 8 percent in 2012.

“Rising violence will depress consumer spending, investment and, more generally, domestic economic activity,” it said.

“This is in addition to European sanctions, particularly on the export of oil,” the report added.

Another study, by the Institute of International Finance, projected that Syria’s real GDP would contract by between 14 and 20 percent in 2012, due to declining agriculture production, dwindling investment and a slump in exports.