Syria's comeback tour returns to Washington for IMF and World Bank gatherings

Three things to watch for as world's finance ministers and central bankers hold talks on global economy

IMF managing director Kristalina Georgieva delivers a speech ahead of the annual meetings in Washington. Bloomberg

Syria's efforts to reconnect with the international community after a nearly 14-year civil war will take the new Damascus government to Washington for the 2025 World Bank and International Monetary Fund annual meetings.

The annual meetings bring together the world's finance ministers, central bankers and private-sector executives to discuss the global economic agenda and support programmes for some of the Bretton Woods institutions' member countries. It also gives foreign officials a chance to meet their US counterparts and have a better understanding of Washington's agenda.

This year's gatherings come amid a shifting economic and political backdrop dominated by trade tensions and high government debt burdens, as well as President Donald Trump's push to align both the World Bank and IMF – of which the US is the largest shareholder – to adhere more with his administration's interests.

A new threat by Mr Trump, where he said China would face a 100 per cent tariff beginning in November, heightened these trade tensions in the days leading up to the meetings.

It also comes on the heels of the United Nations General Assembly in New York a few weeks ago, where Syrian President Ahmad Al Shara declared that his country is back on the global stage after the fall of the Assad regime.

Syria reconnection and reconstruction

Officials from Syria's new government are due to return to Washington roughly seven months after the spring gatherings – the first visit by Syrian officials to the US since Bashar Al Assad's regime fell late last year.

Syria has been seeking to rally support from the international community to help its reconstruction and recovery needs, whose estimated costs range in the hundreds of billions of dollars. The US Senate on Thursday night vote to repeal the Caesar Act, a 2019 law that imposed severe sanctions on entities and officials tied to the Assad regime. The repeal of the law, part of a broader US Defence Department budget that must be signed by Mr Trump, was seen as a crucial step towards reconnecting Syria to the global financial system.

Syrian President Al Shara urges reset with US

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But hurdles remain, including the question of the permanence of sanctions relief, as well as its elections and lingering questions of how the new government and its banking sector will handle anti-money laundering and counter-terrorism financing efforts.

I think it's hard for the multilateral organisations to do much on the financing side until either there's a more permanent government in Syria, but also perhaps more sanctions relief

Rachel Ziemba,
Ziemba Insights

“I think it will be interesting to see how the Syrian government responds to those asks,” said Rachel Ziemba, founder of geopolitical risk firm Ziemba Insights, adding that there are also questions on how Syria's acting government will also work with technocrats coming into its central bank.

Syria made inroads with its appeals to the international community in April, with a round-table that included with World Bank President Ajay Banga, IMF Managing Director Kristalina Georgieva and Saudi Finance Minister Mohammed Al Jadaan to address Syrian needs, which built on talks held in AlUla in February. Ms Georgieva at the time said the fund's initial priorities would be building credible data capability and rebuilding the functioning of the country's central bank and tax policy.

“I think it's hard for the multilateral organisations to do much on the financing side until either there's a more permanent government in Syria, but also more permanent sanctions relief.”

Tariffs and the global economy

Recent data has shown that the world economy, and the US economy in particular, has so far been resilient to the tariff shock first introduced by Mr Trump earlier this year.

“Better than feared, but worse than we need,” Ms Georgieva said in remarks at the Milken Institute last week.

The IMF's economic forecast from July projected the global economy to grow at a 3 per cent pace this year, 0.2 percentage points higher than its April forecast, in part to lower-than-expected US tariff rates on partner countries and a weaker US dollar.

Updated projections from the Peterson Institute for International Economics, a Washington think tank, also bumped up its forecast for global GDP growth to 3.1 per cent this year to 2.7 per cent from last spring, although it expects the economy to slow to 2.9 per cent in 2026.

“That resilience, it's welcome, but I don't think it's likely to last,” Karen Dynan, a non-resident senior fellow at Peterson, told reporters.

Forecasts released by the World Bank last week showed the Gulf region's gross domestic product (GDP) is expected to increase by 3.5 per cent this year, up from its April estimate of 3.2 per cent. For the Gulf, where tariffs have had a limited impact, the question is how much of a softening demand for oil could impact economic growth.

“There's still very much a link from oil prices, global oil demand through to liquidity and economic activity in the Gulf, despite the growth of the non-oil economy,” Ms Ziemba said.

Questions about the dollar – which has depreciated this year amid Mr Trump's tariff agenda – as well as the appetite for US Treasuries and gold have also been raised ahead of this week's gatherings.

Argentina's crisis

The IMF is also contending with a fresh economic crisis in Argentina, which is experiencing a period of market volatility.

The US Treasury on Thursday finalised a $20 billion currency swap framework with Argentina and bought pesos in the open market to help support Argentina's struggling finances. Mr Bessent made the announcement days after meeting with Argentina's finance minister and officials from the IMF, which has a $20 billion programme with the country.

“The success of Argentina’s reform agenda is of systemic importance, and a strong, stable Argentina which helps anchor a prosperous Western Hemisphere is in the strategic interest of the United States,” Treasury Secretary Scott Bessent said in a statement on X.

Mr Bessent said Mr Trump and Argentinian President Javier Milei are expected to meek next week, adding that he plans to see Argentina's finance minister on the sidelines of the annual meetings.