Sudan economic brief : a review of Sudan's 2013 budget (Inglês)

This brief takes a detailed look at Sudan's 2013 budget, with three key aims: (i) to provide a reality check of the macro assumptions underlying the budget; (ii) to assess the structure of the expenditure and how it relates to the policy targets stated...  Exibir mais + This brief takes a detailed look at Sudan's 2013 budget, with three key aims: (i) to provide a reality check of the macro assumptions underlying the budget; (ii) to assess the structure of the expenditure and how it relates to the policy targets stated in the three-year salvation economic program (2011-2013); and (iii) to evaluate the potential impact for the budget of oil fees and transitional financing assistance (TFA), expected from South Sudan, in overcoming shortcomings in the budget as currently planned. Insights into these issues are particularly relevant for the preparation of a possible amended 2013 budget, which might be required given the March 2013 agreement between Sudan and South Sudan. The repercussions of the secession of South Sudan present important challenges for Sudan's budget process with respect to managing the macro-fiscal adjustment and promoting a structural re-orientation of the economy. The analysis in this brief indicates that the 2013 budget falls short in taking credible corrective macroeconomic measures to respond to the oil revenue shock and to encourage the revival in the non-oil sector. The implementation of the agreement with South Sudan will help the budget situation in 2013. Based on South Sudan's production projections for 2013, it is estimated that the inflow of funding from South Sudan to Sudan for the second half of 2013 will be around Sudanese pound (SDG )1.7 billion (SDG 0.7 billion for transit fees and SDG 1 billion for TFA). The budget optimistically assumes that the bulk of the deficit will be financed by domestic borrowing (72 percent of the total fiscal deficit), largely due to limited access to external financing. However, given the fragile domestic market sentiment due to economic uncertainties, the fiscal reliance on monetized financing is likely to increase in 2013, offsetting the price stability targeting and fueling inflation over the short and medium-term.  Exibir menos -

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