Sudan’s GDP to increase in 2015
12 September, 2014Khartoum, Sept.11,2014 (Sudanow) Sudan’s real Gross Domestic Product (GDP) is predicted to recede slightly this year to 2.7% because of fiscal consolidation and is projected to reach 3.8 in 2015.
According to the African Economic Outlook (AEO) report, which was issued Wednesday, the country’s real GDP grew last year by 3.6% up from 1.4% in 2012 due to increase of agriculture, oil, gold and transit revenues.
The report also stated that inflation remained high at 36.2% and is forecast to drop to 26.8% in 2014 and projected at 23.2% for 2015.
The AEO is a product of collaborative work by the African Development Bank, the OECD Development Centre and the UNDP. It presents the current state of economic and social development in the 54 African countries and projects the outlook for the coming two years.
The Director of Finance Ministry’s International Cooperation Department Mr. Omer Mohamed Ahmed described the AEO as the main source of information on Africa’s economic indicators which would be useful for the policy makers and strategic planning.
Following are excerpts from the AEO covering other economic aspects on Sudan:
The repercussions of the July 2011 secession continue to aggravate the challenges of economic management. The resulting high external and internal deficits, coupled with the sustained United States sanctions and the security concerns in Darfur and other 26 states, continue to threaten macroeconomic stability, the outlook for 2014 and medium-term growth. In September austerity measures were introduced to supplement the 2013 budget, including the devaluation of the currency by 29% and removal of fuel subsidies worth SDG 3.6 billion (Sudanese pounds) about 1.2% of GDP, resulting in riots. The 2014 budget is a continuation of fiscal consolidation to maintain macroeconomic stability, with the implementation of well-designed social safety nets. The 2013 finalized Interim Poverty Reduction Strategy Paper (I-PRSP) could be a vehicle for short-term policies aiming at enhancing employment and poverty reduction as well as deepening macroeconomic reform. However, high inflation and the political and economic uncertainty in the interim period leading to the presidential elections in 2015 could pose grave challenges.
Economic linkages and value addition were weakened during the period of oil-driven growth (1999-2011), particularly in agriculture (which provided 47.6% of total jobs in 2011). Also, the high taxes along the supply chains and the recent increase in tariffs on imported inputs in addition to the high costs of energy and infrastructure services raised domestic resource costs and reduced domestic value addition and integration with partners in the global value chains (GVCs). During 2001-07, 41% of all factories closed because of intense competition. The government continues efforts with the UNIDO to boost agro-industrial value addition. However, further policies are required to upgrade the supply chain into value chains. Lifting the burden of high taxes on supply chain actors would promote the participation of small producers and clustering with larger firms. Additionally, increasing the quality and safety measurements of production up to international standards would enhance value addition and participation in GVCs.
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