South Sudan economy to shrink by 2 percent this year, says World Bank

JUBA – South Sudan’s economy is projected to contract by 2 percent this year due to a drop in oil production, World Bank said on Friday.

Firas Raad, World Bank Country Manager for South Sudan said the economy is expected to shrink further in the next fiscal year.

“This year could contract by 1 or 2 percent and it could contract further in the next fiscal year but these are all forecast,” Raad told reporters at Friday’s press conference in Juba.

“We are actually expecting the economy to contract this year, it may contract further in the next fiscal year because of a drop in oil production. Even though oil prices have gone up, there is a drop in production.”

Raad said Russia’s invasion of Ukraine has posed new challenges to the South Sudan economic recovery as it affects inflation rates.

“It creates supply disruptions in the supply chain and then we have more globally instability in Europe with the Russian invasion of Ukraine affecting price inflation and these are food, energy, fertilizers, animal feeds,” Raad said.

He stressed the need to halt conflict and violence throughout the country for the economic to recover.

“We would like to see conflict and violence throughout the country subside for there to be true economic prosperity,” he said.

“So, there are many factors now that are affecting the economy. We are hoping over time, things will stabilize globally, nationally and you will see the recovery.”

He said the forecast for growth in 2023 still faced significant risks, including unpredictable weather conditions and the pace of the global economic recovery.

“We are hoping that the economy can recover as you know there are shocks domestically and globally. Domestic shocks are extreme weather events we see happening that create a lot of force displacement.”