Sudan inflation soars, raising spectre of hyperinflation
KHARTOUM - Inflation in Sudan has risen to one of the highest levels in the world, and the country risks slipping into hyperinflation unless it gets its budget deficit and money supply under control, economists say.
The runaway prices have worsened an economic crisis for millions of ordinary Sudanese and imperilled a political transition under a military-civilian power sharing deal. The government has run up enormous budget deficits by subsidising the cost of fuel, then financed the deficits by printing money.
This has debased the currency, weakening it against other currencies and driving inflation up to annual 230 percent in October, according to the state statistics bureau.
The skyrocketing prices have led many consumers to spend their salaries quickly, particularly on durable items that hold their value.
Idrees Abdelmoniem, who works in marketing at an engineering company in Khartoum, said he had snapped up car spare parts and furniture, but was not as quick with food and drink, whose prices were not increasing as fast.
"If I have something I want to buy outside of the monthly house supplies, I buy it as soon as I get money, and I won't even try to haggle because tomorrow it could be double the price," he said.
Central bank figures show the scale of money printing by the authorities with the M2 money supply measure increasing by over 50 percent in the year to end-September. In September alone M2 rose by 7.13 percent.
Steve Hanke, a hyperinflation specialist at Johns Hopkins University, calculated that on a monthly basis, the inflation rate has accelerated to about 24 percent a month, dangerously high, but still below hyperinflation, generally defined as 50 percent a month.