2013-02-20 05:25:23 - Fast Market Research recommends "Sudan and South Sudan Business Forecast Report Q2 2013" from Business Monitor International, now available
We expect that Sudan will emerge from its recession in 2013, but with serious constraints, including fiscal austerity, security challenges and very high inflation, growth will be subdued. South Sudan will see extremely high growth due to the statistical base effects of its oil shutdown in 2012.
There are still unresolved tensions between the two countries, and both sides accuse the other of violence by proxy rebel groups or in cross-border military incursions. The increasing tension in the domestic political scene in Sudan, as well as its stronger ties with Iran, further elevate the political risk.
Major Forecast Changes
We have begun to publish forecasts for a wide array of South Sudanese economic indicators, including real growth, which (again, due to exaggerated
base effects) is expected to come in at 47.8% in 2013.
We have incorporated the latest UN GDP data to our Sudan historical figures, which indicate that the impact from the secession of South Sudan reduced economic output by nearly a fifth. We are forecasting growth of 2.1% in 2013 in Sudan.
Full Report Details at
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Key Risks To Outlook
A major risk to our outlook to both economies would be a substantial alteration in the timetable for resuming oil flows between the two countries. We expect that the cross-border transit of oil will resume in March, but, if this is delayed (or hastened), our forecasts would need to be altered.
If the ongoing violence - both across national borders and within them - deteriorated into full-blown military conflict, a civil war or another seriously disruptive event (not our core scenario), we would have to reassess many of our forecasts.
Partial Table of Contents:
Major Forecast Changes
Key Risks To Outlook
Chapter 1: Political Outlook
BMI Political Risk Ratings
Al-Bashir: Playing to Gallery of Hawks
- President al-Bashir's grip on power is showing signs of strain, including an apparent coup plot in late November and persistent rumours about his health, which could increasingly drive a hard-line policy stance and postpone the resolution of various internal and external military conflicts.
Deepening Ties With Iran
- The US government's renewal of sanctions on Sudan could result in a deepening of ties between the East African state and Iran, against a backdrop where warships from the latter were hosted at Port Sudan for a second time in less than two months in December.
Chapter 2: Economic Outlook
BMI Economic Risk Ratings
Sudan: Economic Activity
Recession May Be Over, But Challenges Abound
- The Sudanese economy continues to face serious obstacles more than a year and a half since the secession of South Sudan, including very high inflation, a perpetual fiscal crisis, a deep balance of payments deficit, international sanctions and the lack of a comprehensive path out of its predicament. While there is some silver lining, such as important reforms enacted at the behest of the IMF, on the whole we expect that, despite starting from a low base due to the 2012 recession, growth in 2013 will be subdued.
TABLE: SUDAN - ECONOMIC ACTIVITY
South Sudan: Economic Activity
Challenges Remain, But 2013 Should Be An Improvement
- Although we have discussed the South Sudanese economy since independence in 2011, we have now begun to forecast a wide range of variables, including real GDP growth, which we expect will sharply rebound following the collapse of the economy in 2012. We are forecasting growth of 59.0% in 2013, following an estimated contraction of 49.7% the previous year.
TABLE: SOUTH SUDAN - ECONOMIC ACTIVITY
Sudan: Balance Of Payments
Some Headway In Addressing Huge Trade Deficit
- We expect that Sudan will experience some improvement in export growth, and begin to chip away at the deep current account deficit, which we estimate reached 16.0% of GDP in 2012. We believe that the trade account shortfall will slowly begin to narrow in the coming years. However, we project a deficit in both the trade and current accounts throughout our forecast horizon through 2022.
TABLE: SUDAN - CURRENT ACCOUNT
South Sudan: Long-Term Economic Outlook
The South Sudanese Economy To 2022
- The South Sudanese economy is among the most underdeveloped in all of Sub-Saharan Africa, and has significant potential due to its huge oil reserves, expanding population, large amount of arable land and proposed integration with East African nations. However, it faces serious challenges in order to fulfil this potential, including security concerns with its neighbour to the north and among rival ethnic groups, a gaping infrastructure deficit and a lack of human or physical capital.
TABLE: SOUTH SUDAN - LONG-TERM MACROECONOMIC FORECASTS
Chapter 3: 10-Year Forecast
The Sudanese Economy To 2022
Secession Poses Key Risk For Long-Term Growth
- There is strong economic growth potential in the non-oil sector, but the uncertainties related to the secession of South Sudan generate risks for many variables, particularly the fiscal accounts. We see Sudan's economy (excluding South Sudan) expanding by an annual average 4.0-5.0% over 2015-2022. 21
TABLE: SUDAN - LONG-TERM MACROECONOMIC FORECASTS
Chapter 4: Business Environment
BMI Business Environment Risk Ratings
Business Environment Outlook
TABLE: BMI BUSINESS AND OPERATION RISK RATINGS
TABLE: BMI LEGAL FRAMEWORK RATING
TABLE: LABOUR FORCE QUALITY
TABLE: AFRICA - ANNUAL FDI INFLOWS
TABLE: TRADE AND INVESTMENT RATINGS
Chapter 5: BMI Global Assumptions
Growth May Be Turning The Corner
TABLE: GLOBAL ASSUMPTIONS
TABLE: DEVELOPED STATES, REAL GDP GROWTH FORECASTS
Full Table of Contents is available at:
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