São Paulo – Sudan should see growth of 2.9% in 2014 from 2013, mostly due to an expected crop rebound and an optimistic outlook for gold extraction. The information is from an International Monetary Fund (IMF) report following a review of the country’s economy. The IMF’s monitoring of the Sudanese economy is provided for in an agreement and has been released this Thursday (4th).
The IMF also believes inflation in Sudan should drop from 47% in July to 29% by the end of this year. Prices are expected to climb less as the fuel price hike loses steam, food prices go down and the government implements a tighter monetary policy.
At a meeting with Sudanese authorities, IMF staff members also remarked that the country has performed “satisfactorily” under the agreement and quantitative targets set in June have been met. One said target was to increase international reserves.
Sudan has closed government accounts at commercial banks, is cutting down on non-concessional borrowing and has taken legal action to fight money laundering and combat the financing of terrorism. As per the IMF’s report, the agreement, a Staff-Monitored Program (SMP), is entered into by local authorities and IMF technicians for the latter to oversee the implementation of economic programs, and does not necessarily entail financial assistance.
Despite the progress made, Sudan is faced with medium- and long-term challenges. Some of the country’s goals include fostering inclusive growth, increasing international reserves and reducing inflation. “The implementation of the government’s medium-term program faces challenges, including a dearth of external financing, economic sanctions, and an unsustainable external debt burden,” the report reads, remarking also that the Sudanese external debt is in arrears. According to the IMF, Sudan needs to “intensify efforts” in tandem with South Sudan to “secure broad support for comprehensive debt relief” from external creditors.
*Translated by Gabriel Pomerancblum
