Inflation Rate rises.. The results of the Catastrophic War

Sudan Events Report – Nahid Oshi

The prices of goods and services witnessed a noticeable increase and its rates increased after the outbreak of the war on April 15, 2023, and it is still going on until now, and this has led to an increase in the average inflation rate. It was shown by the Central Bureau of Statistics, where it announced an increase in the inflation rate for the first half of the year 2024, which recorded 136.67%, while during 2023 it recorded 66.62% and in 2022 it recorded 138.81%. The exchange rate exploded, and the Secretary-General of the Federation of Chambers of Industry, Abbas Ali Al-Sayed, warned that the basket of needs that was measured by the inflation rate in peace was not commensurate with the needs of the wartime.
We cannot be certain of the credibility of the report, in light of the exchange rate explosion and the lack of job opportunities, and the view of residential rents as the only reason for the rise in inflation is unacceptable.
The economist, Dr. Haitham Mohamed Fathi has two main engines of inflation in Sudan related to financial and monetary policy, noting that the inconsistency of the financial and monetary policies led to a real gap between the individual’s income level and prices and a very high rise in the level of inflation rates, and added, “Whenever it is done Achieving a state of harmony between the financial and monetary policies, we can find solutions and go towards reducing inflation, adding that the second engine is a dynamic engine based on the exchange rate of the Sudanese pound and its price change, as it was stable at the beginning of the war, and then it changed in a different way, gradually and then in a wild way.
It led to a rise, inflationary pressures, and high numbers of inflation, as a result of the deficit financing policy to offset the domestic revenue deficit, the migration of funds abroad, the destruction of public and private property, the decrease in export revenues and the increase in currency speculation. The foreign exchange and the depletion of the reserves are among the most important causes of inflation and the rise in the exchange rate.
April 15th to date is about 7 times more than foreign currencies.
Economy of war

Haitham said the national economy is witnessing a clear state of instability, perhaps the most prominent title is the rapid and significant rise in the foreign currency exchange rate, and the accompanying decline in purchasing power that exhausts people with limited incomes, with the distortion of the pricing mechanism structure. Which resulted in high and illogical levels of prices, and was accompanied by high inflation rates, accompanied by manifestations of stagnation in some sectors and activities as an indication of the phenomenon of complex inflationary stagnation, and the Sudanese economy has turned into a war economy, and the priority is to secure the basic materials.
Like fuel and food, amid a decline in the activity of many productive sectors, he considered that the economy avoided the collapse.
A shocking report, and a former official at the Central Bureau of Statistics described the shocking report because inflation data are collected from about 645 commodities and services from various markets and from the various states of Sudan.
Noting that all the states with higher inflation are under government control, and said, “Does that mean that living in rapid support RSF areas is better than the government, or is the advance on government-controlled areas that have increased the need or demand under which the government was unable to control prices, or are there other reasons?”
He added that general inflation depends on weighting, according to the population in each state. Khartoum, Gezira and South Darfur are the most likely states.
This means that these states were not affected by the population displacement due to the war.
Noting that the inflation of 2024 depends on the prices of 2023, and thus the estimate is a compound deviation. Economic System Disturbances :

The former Undersecretary of the Ministry of Agriculture and Forests, Dr. Abd al-Rahman Hitter for turmoil of the country’s economic system, and he expected it to have a much greater impact than material damage.
The longer the war, the more dangerous it will be, making recovery difficult, calling for a detailed analysis of the social and economic impacts of the war, which would help In prioritizing action in any future process of reconstruction and recovery, the inflation rate was considered the tip of the iceberg in relation to the other effects.