An IMF team led by Mr. Eric Mottu visited Khartoum from June 14-25 to discuss economic and policy developments. Mr. Lodewyk Erasmus, the IMF’s Resident Representative in Sudan, issued the following statement at the conclusion of the visit:
“The IMF staff team had productive discussions with the Sudanese authorities on economic and policy developments. These discussions, including on a new Staff-Monitored Program for 2015-16 to support the authorities’ economic reform efforts, will continue in the coming weeks.
“Remarkable progress has been made toward restoring macroeconomic stability and strengthening economic growth following the shock of South Sudan’s secession. In particular, fiscal consolidation and tight monetary policy helped reduce inflation below 20 percent in May 2015, narrow the external deficit, and support growth at about 3.7 percent in 2014.
“The team welcomed the authorities’ commitment to maintain the momentum of reforms in 2015 and beyond. The outlook remains challenging, however, as lower international oil prices and the conflict in South Sudan are adversely affecting oil-related revenues, which could possibly lead to fiscal and external financing gaps. Difficulties with international financial transactions continue to weigh on growth. Moreover, expansionary policies in support of agriculture have injected considerable liquidity in the economy. These developments could put upward pressure on inflation and the exchange rate.
“To address these challenges, the team called for continued focus on macroeconomic stability through prudent fiscal policies, while prioritizing social and growth-enhancing expenditure and raising tax revenues. It also recommended limiting the growth of liquidity to a pace consistent with low inflation; allowing greater exchange rate flexibility; and implementing structural reforms to improve the business environment.
“The team recognized that Sudan’s large external debt and arrears hinder its access to external financing and weigh heavily on its development. This is compounded by the impact of economic and financial sanctions. The team supports Sudan’s continued outreach to creditors to help garner support for debt relief. It welcomed Sudan’s continued cooperation with the IMF on policies and payments.”
Source: International Monetary Fund (IMF)