South Sudan Economic Update, 2017 : Taming the Tides of High Inflation
The Republic of South Sudan emerged in 2011 from decades of conflict as the world’s newest independent country, with huge state and peace building challenges, and extreme institutional and socio-economic deficits.By August 2016, South Sudan display...
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| Format: | Report |
| Language: | English en_US |
| Published: |
Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/806291508505062484/South-Sudan-economic-update-taming-the-tides-of-high-inflation-policy-options http://hdl.handle.net/10986/28560 |
| Summary: | The Republic of South Sudan emerged in
2011 from decades of conflict as the world’s newest
independent country, with huge state and peace building
challenges, and extreme institutional and socio-economic
deficits.By August 2016, South Sudan displayed all the signs
of macroeconomic collapse,with output contracting, and
inflation and parallel exchange market premium spiraling.The
fiscal deficit remained high, although its exact magnitude
is difficult to estimate given the lack of real time
data.The financing situation is dire. Monetization of the
fiscal deficit explains to a large extent the high
inflation, although there are some indications that
borrowing from theBank of South Sudan had been limited in
recent months.The current account deficit is estimated to
have narrowed to about 1.6 percent in FY2016/17 from about
6.1 percent of GDP in FY2015/16.The South Sudanese Pound
(SSP) continued to depreciate.Restoring peace, including
reform of the security sector, followed by efforts to rein
in public sector borrowing to levels that avoid printing
money are necessary preconditions for any stabilization
program.The FY17/18 National Budget aims to restore
macroeconomic stability, but lacks credibility.Even if the
economy showed some recovery starting in 2018, projections
suggest that poverty will continue to rise through 2019 as
economic growth is likely to be surpassed by population growth. |
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