SOUTH SUDAN
Table 1

2023

Population, million

11.1GDP, current US$ billion

4.4

GDP per capita, current US$392.8

International poverty rate ($2.15)

a67.3
a86.5

a96.6

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a44.1

School enrollment, primary (% gross)

b81.9

b55.0

Total GHG emissions (mtCO2e)

73.4

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2016), 2017 PPPs.
b/ Most recent WDI value (2021).

Better harvests and a partial recovery in
oil production following flooding-related
disruptions are lifting overall growth.
However, food insecurity and extreme
poverty remain high because of climate
and external shocks, declining official development assistance, structurally weak
governance, inadequate service delivery,and localized conflict. The conflict in Sudan presents acute risks to macroeconomic stability amid growing fiscal pressuresand pressing humanitarian needs; a lossof momentum in the political transition
could amplify these risks.

Key conditions andchallenges
A decade after independence, South Sudan’s development prospects remain constrained by fragility amid localized/intercommunal conflict. The 2018 peace agreement ended five years of civil war; however, the transition period needed for its
full implementation has been extended to2025. Oil accounts for nearly all exports
and about 90 percent of government revenues. Historic floods and the COVID-19
pandemic upended a modest economic
recovery in 2019.
International Monetary Fund (IMF)-supported reforms initiated since 2021 havehelped improve macroeconomic and pricestability and supported a recovery in thenon-oil private sector. Higher oil prices following the war in Ukraine have lifted fiscal
revenues, although expenditures have also
increased. Poverty remains dire, with 7 in
10 people living in extreme poverty. Some
8.9 million people, 78 percent of the population, face severe food insecurity, madeworse by higher global food prices anddomestic floods. In addition, 2 million
people are internally displaced (55 percent of whom are women and girls),
and 2.1 million remain refugees in neighboring countries. Since the start of theconflict in Sudan, over half a million
Sudanese refugees and returnees fromSouth Sudan have registered in the country, compounding already severe domestic
humanitarian needs.

South Sudan’s economy faces vulnerabilities, including its dependence on nonconcessional financing and limited fiscal
space to respond to adverse global oil
and food price developments. The conflict in Sudan presents acute macroeconomic risks if oil pipeline routes throughthe country are disrupted.
Implementing the 2018 peace deal andholding credible elections in December
2024 is essential for domestic peace andcontinued growth. Urgent implementationof macroeconomic, governance, and transparency reforms is necessary to ensure
scarce resources are spent on development
needs and to facilitate a sustainable andinclusive economic recovery. Reforms andinvestments are especially critical in agriculture, which supports livelihoods for 80
percent of the population; these will help
to support diversification away from theoil sector, create jobs, and build resilience
to climate change.

Recent developments
GDP growth contracted by an estimated
1.3 percent FY2022/23 due to a fourthconsecutive year of flooding that draggedon oil production and higher food inflation due to the war in Ukraine and thelingering impacts of the COVID-19 pandemic. Nevertheless, a sustained recovery in private sector activity is evident,
supported by improvements in macroeconomic stability due to reforms anchored by IMF programs, higher government spending enabled by a recovery inFIGURE 1 South Sudan / Exchange rate developments

FIGURE 2 South Sudan / Actual and projected poverty
rates and real GDP per capita

SSP/USD
1400

Poverty rate (%)

Spread, percent
300

1200

30008020080070250060200050150600
1004003500902501000

Real GDP per capita (constant LCU)

100401500301000

20502000Oct-20 Apr-21 Oct-21 Apr-22 Oct-22 Apr-23 Oct-23
Spread (rhs)

Official XR (lhs)500100002009 2011 2013 2015 2017 2019 2021 2023 2025

Parallel XR (lhs)

Sources: Bank of South Sudan and World Bank.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

MPO1Apr 24

oil prices, an increased flow of credit tofirms, and a steady expansion in harvested areas as localized improvements inpeace and high crop prices encouraged
farmers to expand planting.
Inflation has increased significantly in recent months, rising from 13.3 percent in
2023H1 to 31.9 percent in January 2024 dueto the weakening currency. The onset ofthe conflict in Sudan and the recent Red
Sea crisis have impacted the oil revenue
flows, causing foreign exchange reserves
to drop from 0.5 months of import coverage in June 2023 to 0.2 months in December 2023. Amid increasing recourse todeficit monetization, the official exchange
rate has depreciated by 42 percent since
the start of 2024, and the premium in parallel markets has widened to 13.7 percent.
Fiscal pressures proved more significant
than anticipated in FY2022/23. Higher oil
prices and non-oil revenue administration
reforms increased overall revenues by
42 percent. Expenses exceeded planned
outlays by 29 percent, with overall
spending increasing by 41.9 percent,mainly due to higher operational andcapital expenditures. The FY2023/24 budget further raised capital expenditures,increased public sector salaries by 130
percent to protect against the impacts ofinflation, and raised transfers to regions.

However, the government has accumulated salary arrears since the start of the fiscal year and reverted to deficit monetization. Data for FY24Q2 show continued
overdrafts at the central bank and the useof oil advances to finance the budget.
Public financial management reforms tostrengthen expenditure controls and cash
management have been initiated. However, there is limited transparency on oil revenues, including servicing of non-concessional external debt. South Sudan remains
at a high risk of both external and domestic
debt distress. Despite a good trade deficit,
the overall current account deficit has
gradually narrowed and shifted into asmall surplus due to large net transfers,
mainly remittances, reflecting increased
confidence in the economy following theexchange rate reforms.

Outlook
Growth is expected to rebound to 2 percent in FY2023/24, supported by a sustained recovery in the non-oil sector andexpanding crop planting. The recovery in
oil production from the impacts of flooding of oil fields has been partially offset
by a temporary decline in production andTABLE 2 South Sudan / Macro poverty outlook indicators

exports in recent months. Over the medium term, growth should remain close to
4 percent as oil output levels recover andnon-oil activity improves, supported bymoderating inflation and higher government outlays on critical public investments, health, and education. This outlook
is predicated on prudent monetary and fiscal policies that anchor macroeconomic
stability, progress on governance, transparency, and structural reforms, and credible elections in 2024 that help to sustain
peace. The pressure on the current accountis expected to increase due to higher debtservice obligations, a decline in oil prices,
and a decline in international aid.
Extreme poverty is expected to remainstagnant at around 70 percent in the medium term as real growth prospects are limited. Addressing this reinforces the urgency of fiscal and public financial management reforms that generate budgetary
resources to increase social expenditures.
While efforts to modernize tax administration using digital solutions and to expand
the tax base could help, fiscal pressures areexpected to remain substantial given sizable debt-service obligations, a reductionin legacy arrears, and increasing social andhumanitarian expenditures. It is thus also vital to strengthen the management andtransparency of oil revenues.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices

2021
-5.1

2022
-2.3

2023e
-1.3

2024f
2.0

2025f
3.8

2026f
4.0

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

-5.1
-4.0
-2.3
-9.7

-2.3
-1.8
-4.8
1.7

-1.3
-1.7
-4.3
3.6

2.0
1.7
0.5
4.1

3.8
2.8
3.3
4.7

4.0
3.0
3.0
5.6

Inflation (consumer price index)

43.1

22.0

18.0

35.0

22.0

12.4

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-5.5
0.9

-1.6
1.0

5.0
0.8

4.2
0.7

5.7
0.6

6.4
0.6

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-6.8
30.9
57.6
-4.4

-6.1
30.1
59.5
-4.0

1.9
30.6
42.9
3.0

2.0
32.0
36.9
2.7

2.0
31.8
32.4
2.8

1.9
31.5
27.5
2.6

67.5
86.6
96.7

68.8
87.6
97.1

69.5
88.0
97.2

70.1
88.3
97.3

70.0
88.2
97.3

69.9
88.2
97.3

2.1
2.7

0.8
2.7

0.9
2.7

1.3
2.7

1.4
2.9

1.5
3.0

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2016-HFS-W3. Actual data: 2016. Nowcast: 2017-2023. Forecasts are from 2024 to 2026.
b/ Projection using neutral distribution (2016) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU.

MPO2

Apr 24