January 1, 2018 / 10:32 AM / 2 years ago

Sudanese parliament passes 2018 budget with 2.4 pct deficit

KHARTOUM (Reuters) - Sudan’s parliament passed its 2018 budget on Sunday and projected a budget deficit of 2.4 percent of GDP, state minister for finance Abdel-Rahman Dirar told Reuters.

International Monetary Fund (IMF) logo is seen at the IMF headquarters building during the IMF/World Bank annual meetings in Washington, U.S., October 14, 2017. REUTERS/Yuri Gripas

The 2018 budget puts total revenues at 116.9 billion Sudanese pounds ($16.70 billion) and total expenditures at 127.2 billion Sudanese pounds ($18.18 billion).

The budget is calculated on the basis of a devalued Sudanese pound. The official rate will be set at 18 to the dollar from Monday - still far below the black market rate - compared to 6.7 now.

The budget projects economic growth of 4 percent in 2018, the cabinet said after approving the bill. The IMF expects growth for 2017 to come in at 3.25 percent.

The government is targeting a sharp fall in inflation to 19.5 percent by the end of 2018 from 34.1 percent at end-2017, a cabinet spokesman told reporters late on Tuesday. Inflation rose to record highs this year on the back of a weakening currency.

Sudan’s economy has been struggling since the south seceded in 2011, taking with it three-quarters of the country’s oil output, its main source of foreign currency and government income.

External debt is set to reach $54.1 billion at the end of 2017 and $56.5 billion at the end of 2018, an International Monetary Fund report said in December.

The IMF urged Sudan to let the pound float freely and to cut energy and wheat subsidies to boost growth and investment. It said Khartoum had a chance to improve the struggling economy after the United States in October ended 20 years of sanctions.

The government has ruled out a market-determined exchange rate, however.

($1 = 6.9982 Sudanese pounds)

Reporting by Khalid Abdelaziz; writing by Dahlia Nehme; Editing by Kevin Liffey

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