IMF: Sudan should lift more food and fuel subsidies
Sudan should gradually lift more subsidies for food and fuel. That recommends the International Monetary Fund in a report published on 1 November, just weeks after 210 people were reportedly killed during protests against the hike of fuel and food prices.The IMF says that a gradual phase-out of fuel and wheat subsidies is needed to allow economic growth. At the same time Sudan should strengthen its social safety nets. The government should address the high inflation and problems regarding the exchange rates.IMF says: “Strong and steady implementation of reforms is crucial for improving macroeconomic stability and enhancing medium-term growth prospects”. At the same time the IMF recognizes the risk involved, including ‘domestic political instability and volatile security conditions’.After the secession of South Sudan, Sudan lost almost 75 percent of its oil production, nearly 55 per cent of its fiscal revenues, and about two-thirds of its foreign exchange earnings. Under current policies, Sudan’s medium-term economic outlook is unfavourable, the IMF concludes.Non-oil real GDP growth would remain below potential at about 3 per cent. Consumer price inflation is expected to decline gradually, although it would still remain in the double-digits, reflecting continued monetisation of the deficit as well as the depreciation of the Sudanese pound.Inflation is expected to decelerate somewhat, but will remain high at about 32 percent. The current account deficit is projected to widen to 11.9 percent of GDP, reflecting a marked decline in gold exports and a slight increase in imports.Read full report here (pdf)News photo: A queue for fuel (Twitter)Related: NCF demands UN investigation into killing of anti-government protesters in Sudan (20 October 2013)
Sudan should gradually lift more subsidies for food and fuel. That recommends the International Monetary Fund in a report published on 1 November, just weeks after 210 people were reportedly killed during protests against the hike of fuel and food prices.
The IMF says that a gradual phase-out of fuel and wheat subsidies is needed to allow economic growth. At the same time Sudan should strengthen its social safety nets. The government should address the high inflation and problems regarding the exchange rates.
IMF says: “Strong and steady implementation of reforms is crucial for improving macroeconomic stability and enhancing medium-term growth prospects”. At the same time the IMF recognizes the risk involved, including ‘domestic political instability and volatile security conditions’.
After the secession of South Sudan, Sudan lost almost 75 percent of its oil production, nearly 55 per cent of its fiscal revenues, and about two-thirds of its foreign exchange earnings. Under current policies, Sudan’s medium-term economic outlook is unfavourable, the IMF concludes.
Non-oil real GDP growth would remain below potential at about 3 per cent. Consumer price inflation is expected to decline gradually, although it would still remain in the double-digits, reflecting continued monetisation of the deficit as well as the depreciation of the Sudanese pound.
Inflation is expected to decelerate somewhat, but will remain high at about 32 percent. The current account deficit is projected to widen to 11.9 percent of GDP, reflecting a marked decline in gold exports and a slight increase in imports.
Read full report here (pdf)
News photo: A queue for fuel (Twitter)
Related: NCF demands UN investigation into killing of anti-government protesters in Sudan (20 October 2013)
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