Experts question IMF growth forecasts for Sudan amid economic devastation

By Suleiman Siri for Radio Dabanga

The International Monetary Fund (IMF) has raised its forecast for Sudan’s economic growth to 7% in 2026 and 15% in 2027, but experts warn that the projections do not demonstrate a sustained recovery from the devastation caused by war. Unemployment, inflation, unreliable economic data, and a widening current account deficit continue to cloud the outlook.

The IMF’s October edition of its World Economic Outlook forecasts global growth of 3.1% in 2026, rising to 3.4% in 2027. For Sudan, it projects growth of 7% in 2026, up from an earlier estimate of 0.7%, followed by 15% in 2027.

The fund has also revised its inflation forecast for Sudan in 2026 downwards, from 75.1% to 41.3%. However, it estimates that public debt will remain exceptionally high, at 334.4% of gross domestic product (GDP) in 2026, although an alternative detailed estimate puts the ratio at 169.1%.

A rebound after economic contraction

Financial and banking expert Omar Sayed Ahmed says the projections in the IMF’s April and October 2026 reports suggest a possible rebound after a sharp economic contraction, but do not establish that Sudan’s economy has returned to its pre-war level or achieved a broad-based, sustainable recovery.

“High growth rates after a major contraction partly reflect the resumption of suspended activity from a low base,” he told Radio Dabanga. Recovery must be assessed through output, production, employment, and household incomes, rather than the annual growth rate alone, he said.

Sayed Ahmed noted that the two reports contain no narrative analysis specifically addressing Sudan. The figures appear in statistical tables and annexes, while historical series, documentation tables, and a country note are available in the April edition.

He highlighted the contrast between projected growth, unemployment estimated at about 59.5% in 2026, high inflation, and a widening current account deficit.

“These indicators should be read together, rather than using the growth figure alone as evidence that living standards are improving,” he said.

IMF forecasts rely on incomplete data

Sayed Ahmed said the IMF’s World Economic Outlook database contains historical data, estimates, and projections covering output, growth, inflation, unemployment, public finances, trade, and the current account.

National statistical agencies provide the underlying historical data, while IMF economists compile the figures and prepare forecasts based on country-specific assumptions. Revisions can be substantial, he said.

In Sudan’s case, documentation in the April 2026 statistical annex indicates that the latest actual national accounts data date from 2019, while the latest data for public finances and the balance of payments date from 2021.

Figures for subsequent years, including the war years, are therefore estimates and projections rather than direct measurements of economic activity, Sayed Ahmed said. The conflict has disrupted statistical collection, production, and markets, increasing reliance on incomplete data and assumptions.

Growth forecasts revised sharply upwards

According to statistical annex 1.1.4 in the April and October editions, the IMF raised its forecast for Sudan’s economic growth in 2026 from 0.7% to 7%. The projection for 2027 rose from 8.1% to 15%, while the estimate for 2025 was revised downwards from 3.2% growth to zero.

Sayed Ahmed said the revisions appeared more consistent with a shift in the expected timing of an economic rebound than with a fundamental improvement in the economy. The October material available to him did not include a country note explaining the changes.

The April edition’s country note for Sudan states that the projections assume the ongoing conflict will end by the close of 2026, followed shortly afterwards by renewed economic activity and reconstruction.

“The projections are conditional on the fighting stopping; they are not a reading of the current trajectory,” he said.

The low base from which growth is measured is also significant. If Sudan’s GDP in 2022 is indexed at 100, the April statistical series indicates that output fell to about 79 in 2023 and 61 in 2024.

Under the projected growth rates, output would rise to about 65 in 2026 and approximately 75 in 2027. This would leave the economy below three-quarters of its pre-war level. Recovering the 2022 level from the 2024 base would require cumulative growth of about 65%, Sayed Ahmed said.

The IMF’s April report also examines conflict and economic recovery in a general chapter that does not focus specifically on Sudan. It finds that recovery after wars tends to be slow and uneven, and depends on peace being sustained.

Where peace holds, output rises by about 3.9% five years after a conflict ends, while only around half of the losses recorded five years after the conflict began are recovered, according to the chapter.

Sayed Ahmed said stronger recovery was associated with macroeconomic stability, including low and stable inflation and a stable real exchange rate. Against that background, projected growth of 15% in Sudan in 2027 represents an ambitious assumption about the rebound in activity and improvement in conditions.

He said recovery should also be assessed using independent indicators, including agricultural and industrial production, electricity supply, transport, exports, investment, employment, and household incomes, alongside the actual level of output.

Lower inflation does not mean lower prices

Sayed Ahmed stressed that inflation measures the rate at which prices rise, not the overall price level or purchasing power.

The IMF projects inflation of 41.3% in 2026, down from 99.9% in 2025 and below the earlier estimate of 75.1%. However, it expects inflation to rise again to 50.9% in 2027, suggesting that the slowdown is not expected to be sustained.

The figures mean that prices are projected to rise more slowly, not that goods and services will become cheaper, he said.

Inflation forecasts can be affected by deficit financing, demand, the availability of goods and imports, exchange rates, and the methods used to measure prices. Sayed Ahmed said the figures alone were insufficient to establish the relative importance of these factors in Sudan.

Official price baskets may also fail to reflect living costs across the country, where conditions and transport costs vary and informal markets have expanded.

High unemployment is consistent with weak production and incomes, but does not by itself explain the slowdown in inflation, he said.

The current account deficit is projected to widen from 8.6% of GDP in 2025 to 14.6% in 2026, before narrowing to 13% in 2027. A larger deficit does not necessarily cause an immediate rise in prices, as its effects depend on financing, foreign currency availability, exchange rates, and import restrictions. It could, however, increase the risk of shortages and further pressure on the currency.

Money creation poses further risks

Sayed Ahmed distinguished between the current account deficit and the government budget deficit, noting that the two can influence each other but are not the same.

A current account deficit can be financed through capital inflows and external financing, the use of reserves, accumulated arrears, or adjustments to imports and the exchange rate. Such inflows can include remittances, investment, borrowing, and informal trade. Difficulties in measuring unrecorded transactions add uncertainty to estimates of the deficit and how it is financed.

Government borrowing from the central bank, by contrast, relates to the budget deficit. It can increase liquidity and put pressure on the exchange rate and prices, particularly when it is not matched by growth in production or demand for the domestic currency.

If external financing remains scarce while the government continues to finance its deficit through money creation, the risk of further currency depreciation and inflation increases, Sayed Ahmed warned. This outcome is not an automatic consequence of the current account deficit alone.

Economic losses remain difficult to measure

Sayed Ahmed said cumulative economic losses could not be calculated accurately from annual contraction rates alone without a consistent series of real GDP data, a clear base year, and confirmation that the estimates had not subsequently been revised.

For illustration, if the reported contractions of 20.8% in 2023 and 23.4% in 2024 are applied sequentially to the same GDP series, output would have fallen by about 39.3% compared with 2022.

Applying the IMF’s October forecast of 7% growth in 2026 to that trajectory would still leave output about 35% below its 2022 level, he said.

These are conditional calculations, not an independent estimate of the actual loss. They measure recorded output rather than the destruction of physical and human capital or the effects of displacement.

A positive growth rate can therefore conceal only a partial rebound from an exceptionally low base, he added.

Former regulator questions IMF assessment

Shawqi Azmi Mahmoud, a former director-general of Sudan’s Capital Markets Authority, criticised the IMF’s October 2026 World Economic Outlook, saying its figures could be misleading if considered separately from conditions on the ground.

He pointed to the inflation forecast of 41.3%, arguing that it could give the impression of an improvement even as prices of essential goods remained extremely high.

The lower rate means prices are rising more slowly than during the corresponding period a year earlier, he said. He linked the slowdown to exchange-rate movements, noting that the Sudanese pound had lost about 80% of its value.

Azmi also attributed economic contraction to the continuation of the war, the exclusion of productive areas from the economy, and the movement of goods across neighbouring borders through trading arrangements that often operate outside formal banking channels, including barter.

The conflict has halted industrial, agricultural, and livestock activities in many affected areas, contributing to unemployment and lower GDP, he said.

Under the conditions of a war economy, Azmi argued, economic statistics can fluctuate considerably and may not accurately reflect people’s circumstances or provide a reliable guide to the future. He said Sudan had the resources to become a developed country if there were sufficient national commitment.

Government data and economic policy under scrutiny

Azmi said the IMF generally obtains economic and financial data from governments and central banks in member countries, which are required to provide regular statistics. Under normal circumstances, the fund also sends missions to assess economic performance and compliance with reform programmes.

Such programmes commonly include exchange-rate liberalisation, trade liberalisation, subsidy removal, and higher taxes, he said.

Azmi explained that economic growth measures the increase in the volume of goods and services produced, usually through changes in GDP. In Sudan, a resumption of activity in states where economic life had largely stopped could raise the growth rate because the comparison is made with the previous year’s depressed level.

“We hope that all Sudanese states will return to the production cycle to achieve a leap in economic growth,” he told Radio Dabanga.

He said the government faced major challenges in securing the financing needed to keep public services and institutions operating while the war continued in some states.

Rather than relying on taxes, levies, and high fees imposed on a population exhausted by war, the government should explore modern financing methods, including issuing financial securities and securitising gold assets rather than selling the gold outright. He also proposed converting development projects in the budget into independent, investment-oriented units financed through investment funds.

Azmi called for credit policies to prioritise manufacturing in order to reduce imports. He also advocated stricter pricing controls, arguing that competition in Sudan increasingly revolved around buying foreign currency and passing the cost on to consumers, rather than improving the quality of goods or lowering prices.

Auditor-general’s office criticised over transparency

An expert at Sudan’s auditor-general’s office, who requested anonymity, questioned the reliability of government data used in IMF reports, citing structural and administrative weaknesses and financial and administrative corruption in state institutions.

The expert attributed the erosion of public-sector accountability to failures involving the Ministry of Justice, the public prosecutor, the auditor-general, and the public service administration.

Multiple decision-making centres within individual institutions had weakened accountability for public officials, the expert said.

The source also criticised the auditor-general’s handling of oversight, arguing that attention had been directed towards the private sector while scrutiny of public institutions had been insufficient. The expert alleged that this approach risked concealing corruption and undermining public confidence.

The source said IMF assessments based on government figures could not be considered reliable without greater transparency, effective anti-corruption measures, and independent auditing.

The expert also alleged that money laundering, suspicious financial flows, and the diversion of funds into prohibited trade and speculation contributed to instability in the currency market.