Notwithstanding an improvement in near-term growth prospects on the back of lower inflation, the fundamental outlook for Sudan s economy remains bleak. Tight fiscal and monetary policy stances have brought a degree of stability to the Sudanese economy following the upheaval associated with the split from South Sudan. ...With Western-imposed sanctions continuing to heavily restrict trade, investment and access to capital, Khartoum has made ef- forts in recent quarters to strengthen its ties with the Arab world, notably with Saudi Arabia and Qatar. The decision to support the Saudi Arabia-led military campaign against the Houthi rebels in Yemen and vocal backing of Riyadh s decision to execute Saudi Shi a cleric Nimr Baqr al Ni in January ---- amount to a clear foreign policy shift from Khartoum; and it is one that is already yielding some economic benefits. An official from the finance ministry stated last year that Sudan had received some USD-bn in concessional loans from Gulf countries between May and July ----. ...Indeed, notwithstanding the economic stabilisation seen fol- lowing the split from the South, and improvement in near term growth prospects, economic outlook remains bleak. Looking ahead, our outlook is for moderate but unspectacular growth over the medium term; we forecast growth to average -.- annually between ---- and ---- compared to the Sub-Saharan
...On December --, the SPP lurched from SPP-.--/USD, where it had been pegged since independence in ----, to SPP--.--/ USD, representing a depreciation of some -- against the US dollar. It has since weakened by a further -- to stand at SPP--.-/USD at time of writing on March -. ...Our negative outlook for South Sudan s economy has long been underpinned by a volatile and uncertain political landscape. Given the numer- ous rounds of failed peace talks over the past two years and the stubborn obstacles that still stand in the way of a meaningful political settlement it is too early to say whether the latest attempt to negotiate a lasting truce will lead to anything substantive. However, in the near term the economy is teetering on the brink of collapse due to a plummeting currency, dwindling state coffers and soaring inflation. ...Given the numer- ous rounds of failed peace talks over the past two years and the stubborn obstacles that still stand in the way of a meaningful political settlement it is too early to say whether the latest attempt to negotiate a lasting truce will lead to anything substantive.
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