The Syrian situation, which crystallises local, regional and international issues, is still critical. From a clash between the Bashar al-Assad regime and the Syrian rebels in 2010, there are now a significant number of actors and an increasing number of front lines. The conflict has become an international one, with the intervention of Russia and Iran on the side of Bashar al-Assad. The coalition of western forces (American, British and French) has also intensified its level of engagement, specifically to tackle the threat of Islamic State (IS). In December 2016, the victory of the pro-regime forces, supported by Iranian- and Russian-led air strikes of Eastern Aleppo, has allowed Damascus to retake this last remaining rebel-held urban centre. While this victory does not mean the end of the civil war, it probably dashes the last remaining hopes of the rebels, who have been pushed back to the rural regions in the west and the less populated regions to the east, of gaining a military victory. Emboldened by the military victories and after the failed peace negotiations between his regime and the rebels in April 2016, Bashar al-Assad is now refusing any form of compromise and has promised that the Syrian army will fight on until the whole country has been recovered. Nevertheless, the regime's forces are still dependent on military support from its Russian and Iranian allies. These allies, apart from providing military support, also support the Assad regime at the UN Security Council. The new US president, Donald Trump, is also likely to change the perspectives on the civil war. The new president's position represents a break with that of the Obama administration, which, like France in particular, made Assad's departure a prerequisite of any peace deal. The United States will thus be aligned with Turkey among those international actors considering a transitional government in Syria which would allow President Assad to remain as Head of State. On the ground, this change will be reflected in a reduction in US aid to the rebels, in order to give greater priority to the groups opposing the regime which are fighting IS, especially in the north of the country. Militarily and diplomatically, the balance of power thus seems to be moving in favour of the Bashar al-Assad regime. Nevertheless, with the rebel groups and IS holding out in Syria, the conflict is likely to continue in 2017.

The erosion of Syria's economic structure continues. Because of the lack of data, it is difficult to assess the economic impact of the conflict. This is because the country remains divided up between different areas of power and the lasting conflict continues to generate the destruction of infrastructures and the displacement of people. The World Bank estimates that Syrian GDP shrank by more than 15.4% a year on average between 2011 and 2014. In 2016, this international organisation estimates that GDP contracted by a further 4%. The decline in GDP is mainly attributable to the fall in oil production. In 2010, Syria produced the equivalent of 360,000 barrels per day (b/d) compared with 32,000 b/d in the first ten months of 2016. Moreover, the ongoing clashes and the increasing number of air strikes have significantly damaged both public and private infrastructures, annihilating a significant number of sectors such as transport, construction and trade. In its March 2016 report, the World Bank assessed the total damage to the country's main cities (Aleppo, Homs, Darra, Lattakia and Idlib) and put the cost of the destruction at between USD 5.9 and 7.2 billion. The humanitarian situation is also critical, both in the combat zones and in the areas controlled by the rebels or by the regime.  Since April 2011, the United Nations estimates that half of the Syrian population has been displaced, of which 4.8 million are refugees outside the country and 7.6 million are displaced within Syria. The civilian population faces water shortages, power cuts and a worsening health situation, especially in the besieged towns and cities. The supply problems linked to the difficulties in the transport of goods have resulted in an exponential increase in inflation. In 2016, the removal of subsidies on oil and food, as well as the depreciation if the Syrian pound against the dollar pushed consumer prices up by over 45%.

The public finances of Bashar al-Assad's regime have deteriorated steadily since the intensification of the conflict. The public deficit is expected to come in at 20% for 2015 and could continue to widen. The fall in oil revenues and mandatory levies led to a contraction in public revenues, which are put at less than 7% of GDP in 2015. Meanwhile, government spending grew significantly under the weight of the increase in military spending. The disappearance of public services in the combat zones and their decline in the areas controlled by the regime have led to a reduction in current spending, although this has not slowed the surge in public spending. The current account balance will also show a sizeable deficit. Oil revenues have collapsed, falling from USD 4.7 billion in 2011 to USD 0.14 billion in 2015. Foreign exchange reserves have been drained since 2010, falling from USD 20 billion to less than USD 1 billion at end 2015. The exchange rate will continue its downward trajectory, falling from SYP 47 per US dollar to SYP 420 to USD 1, thus paving the way for the development of a large black market in foreign currency.