DAMASCUS, Syria, Jan 5, 2012: Syria's economy is reeling from violence sweeping the country, and tough sanctions imposed by the United States, Europe and the Arab League, but ordinary citizens are bearing the brunt of the turmoil.

Outside a petrol station in Damascus, dozens of people carrying big red cans queue up to buy heating oil.

Attacks on gas pipelines and power stations, together with the oil embargo imposed by the European Union in September, have caused severe electricity and fuel shortages, to coincide with the onset of winter.

In the heart of the Syrian capital's historic medina, the centuries-old buildings transformed into boutique hotels are virtually empty, in stark contrast to recent years, when many of them were booked up.

"The economy is flat because tourism, which represents 10 percent of GDP, is is at rock bottom," says Jihad Yazigi, editor-in-chief of economic bulletin The Syria Report.

"Several factories that depend on the local market have shut their doors because demand has collapsed. The political uncertainty is a big factor in the instability, because it undermines the confidence of investors and consumers," he added.

Syria's economic boom which began in 2005 has given way to recession, since the anti-government protests first erupted last March.

The employment ministry in December put the jobless rate at between 22 and 30 percent compared with around nine percent before 2011.

Sonia Khanji, who runs a company that produces and distributes cosmetic products in Damascus, says she has had to cut her expenses, "particularly the working hours and salaries of the staff, to avoid having to lay them off or shut the business down."

"Demand has dropped and luxury products are the first to be hit by the crisis," Khanji said, adding that "even our exports to Jordan, Iraq and the United Arab Emirates have fallen, because the situation that prevails is discouraging our partners from signing new contracts."

But despite the general economic gloom, some industries continue to prosper, notably agriculture, which accounted for 24 percent of GDP and employs a quarter of the workforce, thanks to a bountiful harvest following heavy rains last year.

The same goes for the construction sector. In the southern suburb of Jaramana, like elsewhere in Syria, building sites and new apartment blocks -- often illegal -- abound, due to the strong demand of recent years.

"I have an empty plot of land located outside the zone covered by the urban development plan, on which I'm putting up this building without a permit," said one property developer who gave his name only as Yussef.

Yazigi, The Syria Report's editor, says real estate is booming because it offers refuge in a time of crisis, amid fears of a possible collapse of the Syrian pound.

"Construction has benefited from the leniency of the authorities towards offenders carrying out illegal projects," he said.

Meanwhile, state institutions appear to be largely untouched by the crisis, with their staff enjoying a pay increase of 20 to 30 percent following a government decree last April.

This rise has been largely offset by the devaluation of the Syrian pound, which has shed nearly 27 percent of its value since then.

But for now, Yazigi argues the government has succeeded in containing the economic crisis.

"It must be admitted that the central bank has managed the value of the Syrian pound and the rate of inflation better than expected, two key economic indicators, which seem to be under control," he said.