Sudan expects inflation to rise further in 2012 buss

Sudan's inflation rate, now at 37 per cent, will continue to rise until the end of the year as the government cuts back fuel subsidies and a difficult economic situation weighs, officials said on Sunday. An economic crisis aggravated by the secession of oil-producing South Sudan a year ago has fuelled sharp increases in food and other prices in Sudan, stoking discontent against the government of veteran President Omar Hassan Al-Bashir. Sudan has so far avoided a mass uprising like Egypt but a tough austerity programme that included scaling back fuel subsidies sparked small-scale protests four weeks ago. South Sudan's secession deprived the African country of its main source of state revenues and dollars, which it needs to fund imports. Annual inflation hit 37.2 per cent in June, double the level in June 2011, as Sudan struggles to pay for imports - much of its needs including many basic food products come from abroad. In July, inflation will probably rise further as the gradual lifting of fuel subsidies had not yet been fully factored in, said Alim Abdel-Ghani, head of the trade department at the central bureau of statistics. "In June only the last week saw fuel subsidies being cut," he told reporters. Adel Abdelaziz, a senior official in the finance ministry of Khartoum state, said the national average inflation target of 25 per cent would be hard to reach. "It needs extra efforts from authorities," he said. Annual inflation would decline from the start of 2013, the statistics office said in a statement on Sunday. The austerity measures also include moves to trim government bureaucracy and raise taxes and import duties. Landlocked South Sudan needs to export its oil through pipelines in the north, but the two sides have failed to reach an agreement on how much it should pay to do this. South Sudan shut off its oil output in January after Khartoum started taking some oil for what it called unpaid fees. From ahramonline