Inflation in Sudan remains moderate

Nov 16, 2006 (KHARTOUM) — According to recent data released by Sudan’s Central Bank, consumer price index (CPI) inflation in the country stood at 4.3% year-on-year (y/y) in June 2006, up from 2.8% in the previous month.

On a monthly basis, consumer prices grew 4.4% in June, after growing 3.2% month-on-month (m/m) in May.

Significance: Consumer price inflation accelerated from 8.3% y/y in January 2005 to about 13.9% in July last year, on the back of supply constraints such as bottlenecks at ports, and expansionary policies.

CPI inflation gradually decelerated in the third and fourth quarters to end the year at 5.6%, owing to prudent policies and improvements in customs procedures, which have eased inflationary pressures.

Since then, y/y inflation rates have remained moderate, ranging from 1.8% to 5.8%. CPI inflation stood at about 4% in the first half of 2006, sharply down from 8.2% recorded a year earlier.

Given recent conservative policies implemented by the central bank, we now expect the inflation rate in 2006 to be less than 6%, beating the International Monetary Fund (IMF)-agreed target of 7.5%.

(Global Insight)