Sudan Economic Outlook

• Real GDP is expected to grow only modestly during the next two years, chiefly because of the loss of oil revenue and population following the secession of South Sudan.
• The government has attempted to address increased economic and social challenges through the introduction of austerity measures.
• Youth unemployment, particularly among university graduates, is high and increasing.

In 2011 real Gross Domestic Product (GDP) grew modestly following the loss of 75% of oil revenues and the secession of South Sudan in July 2011. The outlook for growth in 2012 and 2013 is expected to be affected by the same factors. Average inflation surged  in 2011 because of the rise in food prices and the depreciation of the Sudanese pound (SDG). Similarly, the current account deficit is estimated to deepen in 2012 because of the loss of oil revenues, intensifying armed conflict and the financing of peace agreements.

As a result of economic sanctions and an already heavy debt burden, external borrowing options remain severely limited, raising the likelihood of an expansion in internal borrowing. The government has put in place a three-year economic emergency programme aimed at cutting spending. It partly removed subsidies on sugar and oil products and is expected to restore fiscal discipline at all levels of government by controlling expenditure.

Youth unemployment is high and growing. Sudan’s labour market is underdeveloped and heavily dependent on agriculture and the informal sector. Currently, labour force  participation and the unemployment rates among the young stand at 32.9% and 22%, respectively, compared to 43% and 11% for adults. Sudan’s high birth rate has resulted in a relatively young population and a high proportion of young people of working age.

Existing youth employment programmes are not co-ordinated under a coherent national growth and employment strategy that focuses on the young, and no measures have been taken to address disparity in employment along urban-rural and gender lines. These programmes and initiatives remain ineffective, as they face the challenge of facilitating the transition from school to work, as well as that of the victims of civil wars and exsoldiers into productive civilian activities.