Country Report Sudan February 2009

Summary

The Economist Intelligence Unit's central scenario is that a major political crisis will be averted in 2009-10, with the ruling National Congress Party maintaining control. However, there are significant downside risks.
Strain will increase on the north-south Comprehensive Peace Agreement in the run-up to planned elections in 2009, and particularly as both sides rearm prior to the referendum on southern independence in 2011.
Progress with economic reform will be limited, as the government is preoccupied with the political situation and unwilling to risk losing support from key constituencies. The fiscal deficit will average 2.2% of GDP in 2009-10.
The world economy is now forecast to experience a recession in 2009, with global GDP growth shrinking by 0.8%, recovering only slowly in 2010. Brent crude will fall to an average price of US$45/barrel in 2009-10.
Global economic and domestic political pressures will constrain the non-oil sector, and we expect real GDP growth to average 4.2% over the outlook period.
As commodity prices fall, inflation is projected to average 9.6% in 2009-10. The Sudanese pound will depreciate to an average of about SP2.3:US$1 in 2009 and SP2.4:US$1 in 2010.
We expect the current-account deficit to widen sharply to an average of US$4.6bn (7.4% of GDP) in 2009-10.

Talks have begun in Qatar between the Sudanese government and the most powerful rebel group, the Justice and Equality Movement, amid fresh fighting between the two in Darfur.
Despite media rumours to the contrary, the International Criminal Court has denied that it has already issued, or decided whether to issue, and arrest warrant against the Sudanese president, Omar al-Bashir.
As oil prices remain low, the deputy finance minister, Al-Tayib Abu-Gnaya, told the National Assembly that the treasury was unlikely to receive any net oil revenue until April, and that government spending must shrink by 50%.
The Government of Southern Sudan's 2009 budget has been passed, but is likely to be revised downwards in the coming months, as oil revenue makes up a much larger share of its total revenue than the national government's.
A new Petrodar oilfield, Qamari, is set to be inaugurated by Mr Bashir in March. It is expected to produce 30,000 barrels/day initially. It is unclear if the pipelines and other infrastructure required to transport it are ready.

Source: Country Report

This report covers the following industry codes:
SIC Code: 1;10
NAICS Code: 11;212