The primary risk is that the economy will collapse and that Syria will cease to exist as a country. A large amount of productive capacity has been lost — as much as 80% according to some estimates. The UN’s Economic And Social Commission For Western Asia (ESCWA) estimates the economy shrank by 28% and 17% in 2012 and 2013 respectively although what remains is at least set to slow only marginally in the near term (Chart 1). The World Bank believes the economy contracted by 16% in 2015 with the risks for future outturns heavily weighted to the downside. Oil production is running at just 2% of its pre-war capacity and is unlikely to recover in the near term. The potential for growth has been severely damaged by the destruction of infrastructure and natural resources and the loss of skilled people who have died or fled as a result of the conflict. There is a risk of continued high inflation, which will add to both financial instability and the positions of households. Inflation is estimated to increase by 30% in 2015 because of continued trade disruption, shortages and a sharp depreciation of the Syrian pound. Meanwhile the Syrian regime of Bashar al-Assad has been weakened by international sanctions.