Numerous conflicts, lack of guarantees of capital security and large-scale expropriation are constraining factors for the Sudanese economy. Poverty and social inequality, along with large expenditures on militarization and corruption, complicate the development of the country.
In 2022, the economic situation in Sudan continues to be unstable. The political crisis, the budget deficit and the high level of debt burden have a negative impact on the country's GDP. It is expected that by the end of 2022, the indicator will show a negative trend (-0.3% according to the IMF). At the same time, it is predicted that in 2023 GDP will show growth of 2.6%, and in 2025-2026 it will exceed 6%.
The development of the Sudanese economy can be facilitated by a reduction in the current account deficit, as well as a decrease in imports combined with an increase in exports of cotton and gold, which make up 10% and 44% of the country's total exports, respectively. Given that the secession of South Sudan has deprived the country of 75% of its oil reserves, the Government is making significant efforts to develop the export of minerals, primarily gold.
Sudan's economy is experiencing high inflationary pressures. In 2021 The inflation rate was 359.1%. One of the main inflationary factors is the lack of foreign currency to ensure food imports. The situation is also aggravated by the ongoing failure of logistics chains since 2020.
It is expected that against the background of an increase in grain supplies in the second half of 2022, inflation will decrease to 154.9%. Further implementation of political and economic reforms will contribute to the stabilization of the price level, which is why the inflation rate is projected to decrease to 9.9% by 2026. At the same time, it should be noted that GDP by PPP per capita in 2021 increased by 2.0%, and by the end of 2022, according to the forecast, it will increase by 4.1%.
The value of the Sudanese pound has decreased by 950% since February 2021, when the Central Bank of Sudan liberalized the exchange rate in order to reduce parallel market activity and debt burden. This measure made it possible to reduce the difference between the official and market exchange rates, but the parallel exchange market continues to operate, which complicates the replenishment of the country's foreign exchange reserves.
In the medium term, further depreciation of the national currency is predicted.
