Substantial progress has been achieved in stabilizing and restructuring Sudan’s economy, concluded the IMF in the recently published 2003 Article IV Consultation with the Arab State.
According to a Public Information Notice (PIN), the recent progress on peace negations could pave the way for a resolution to the conflict in the South, which together with the economic progress, could accelerate growth and economic development in and lead to a normalization of the relations with international financial institutions.
Sudan adopted in 2002 and 2003 a strengthened economic reform program to consolidate macroeconomic stability, reinforce the reform momentum, and modernize the macroeconomic management regime. These reforms have helped reinforce economic stability.
Real gross domestic product (GDP) growth in 2002 slowed slightly from about six percent in 2001 to 5.5 percent in 2002, because of delayed rainfalls that adversely affected agriculture production as well as infrastructure bottlenecks that reduced the manufacturing sector's productivity. The IMF Executive Board forecasts that real GDP growth in 2003 will rise to at least 5.8 percent led by a pickup in non-oil GDP growth.
Oil sector growth, however, is expected to slow down to 13.8 percent in 2003, compared with 24.7 percent in 2002, reported the IMF. Inflation rose to 8.6 percent in 2002, reflecting expansionary policies in early 2002 and large inflow of foreign exchange in the second half of the year.
Inflation, however, declined to 7.6 percent at end-June 2003, and is expected to be in line with the program target of seven percent.
Sudan maintains a relatively open trade regime with few non-tariff trade barriers and a simple average tariff rate of 22.7 percent. Overall, the openness of the trade regime in Sudan compares favorably with that of the advanced economies. Furthermore, progress is being achieved with regard to Sudan's application for World Trade Organization (WTO) accession and the authorities expect to conclude negotiations in five years.
Finally, Sudan accepted on October 8, 2003, the obligations under Article VIII, Sections 2, 3, and 4, of the Fund's Articles of Agreement, indicating that the exchange system shall be free from restrictions relating to current account transactions. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
