Sudan’s economy to be hit hard by pandemic: IMF
April 15, 2020 (WASHINGTON) – The Sudanese economy is projected to sink deeper into recession this year as a result of the coronavirus pandemic that is sweeping the globe, the International Monetary Fund (IMF) said on Tuesday.
Sudan like most world countries imposed tight restrictions and curfews in its bid to contain the spread of the coronavirus which is almost certain to hurt economic activity.
In its World Economic Outlook (WEO) released today the IMF sharply revised its 2020 economic growth forecasts for Sudan from -1.2% to -7.2% and from -0.6% to -3.0% in 2021.
The inflation rate for 2020 was projected to be at 81.3% compared to an initial estimate of 66.4%. In 2021 it is forecasted to be 91.1% which was also far higher than the previous 74.5% figure.
The IMF warned that but said its forecasts as they currently stand are marked by “extreme uncertainty” meaning that the actual outcomes could be far worse depending on the course of the pandemic.
The COVID-19 could not have come at a worse time for Sudan which was seeking to reform its economy after the ouster of president Omer Hassan al-Bashir last year in a popular revolution.
The pandemic might also deal a major setback to Sudanese efforts in obtaining financial assistance from the international community which is currently focused on battling the spread of the virus.
The Sudanese government led by Abdulla Hamdok is mulling a series of steps aimed at convincing the donor community that it is serious about adopting fiscal reforms.
Key among these steps is lifting fuel subsidies.
In its latest Article IV consultation with Sudan issued last month, the IMF urged Khartoum to take on the fuel subsidies and gradually lift them while at the same time increasing spending on the vulnerable sections of the society.
The Washington-based international financial body stressed at the time that the foreign exchange rate in Sudan system remains “highly distorted” & recommended liberalizing it.
The East African nation is plagued by long queues in fuel stations & bakeries as shortages mount. Most recently daily electricity outages have become common.
The IMF acknowledged that public tolerance for economic policy reforms sought by the government “has been eroded by economic hardship”.
“[W]hile the government enjoys substantial goodwill the window of opportunity for reforms is likely to be limited”.
(ST)