Sudan Inflation Shoots Up, Economy to Get Worse
Sudanese economists have warned that the economic situation in the country is likely to further deteriorate leading to considerable rises in food prices during the coming months, Sudanese newspapers reported Tuesday.
According to experts, the market prices will be difficult to control, especially because the month of fasting will begin in mid-May and will significantly boost the demand for sugar, flour and vegetable oils, Middle East Monitor reported.
On Sunday, Sudan’s Central Statistics Office blamed increases in food and energy prices for the rise in the annual rate of inflation which rose in March from 33.53 to 34.68%. Economists attributed the increase to the fall of the Sudanese pound which has lost 100% of its value since South Sudan’s secession, pushing inflation rates to record levels. March is the eighteenth straight month that the inflation rate has risen.
Last year, Sudan’s Central Bank introduced an incentive policy increasing the foreign currency exchange rate from 6.5 SDG to 15.8 SDG ($2.37), representing an increase in commercial banks of 131%.
In a move to reduce demand for the US dollar and protect domestic industry, the government banned the import of frozen meat and fish and raised tariffs on a number of imports. However, these restrictions pushed inflation higher given the country is heavily dependent on imported goods.
The projected deficit in Sudan’s 2017 budget is estimated at 2.1% of GDP compared to 1.6% in 2016. This is expected to lead to a decline in the countries growth rate from 6.4% to 5.3% with a targeted average inflation rate of 17%.