JUBA – South Sudan’s economy is projected to grow by 22.4 per cent in 2026, according to the International Monetary Fund (IMF), placing it among the fastest-growing economies globally.
The projection, contained in the Fund’s latest regional outlook, is largely driven by expectations of a rebound in oil production and exports following disruptions linked to the conflict in neighbouring Sudan.
However, historical data from the IMF, World Bank, and African Development Bank (AfDB) show that such optimistic forecasts are not new and have frequently failed to materialise. Over the past several years, projections for South Sudan have consistently pointed to recovery, only to be revised sharply downward as economic conditions deteriorated.
In its 2021 outlook, the World Bank projected that South Sudan’s economy would grow by 1.5 per cent in 2022 and 3.0 per cent in 2023.
Yet subsequent estimates showed the economy instead contracted by 2.3 per cent in 2022 and 1.3 per cent in 2023, reversing earlier expectations of recovery. A similar pattern is evident in IMF data.
In 2022, the Fund projected growth of 4.6 per cent for the 2023/24 fiscal year, but by 2024, that figure had been revised to a contraction of 8.5 per cent, reflecting worsening macroeconomic conditions.
More recent World Bank projections also highlight the volatility. In 2024, the Bank forecast modest growth of 2.0 per cent for 2024 and 3.8 per cent for 2025. Yet updated estimates later pointed to a sharp contraction of 23.8 per cent in fiscal year 2025, followed by a projected rebound of 48.8 per cent in 2026.
The AfDB has similarly projected recovery—forecasting 4.0 per cent growth in 2024/25 and 12.1 per cent in 2025/26—but these projections are likewise contingent on improvements in oil production.
The recurring divergence between projections and outcomes is largely explained by South Sudan’s heavy dependence on oil. The sector accounts for nearly 90 per cent of government revenue and dominates exports and foreign exchange earnings.
This concentration makes overall economic performance highly sensitive to disruptions in oil production and transport.
During the recent crisis, oil output dropped from approximately 160,000 barrels per day to about 60,000, with the World Bank estimating revenue losses of around $7 million per day. Such shocks quickly translate into negative growth, undermining earlier forecasts that assume stable production.
At the same time, macroeconomic data show that South Sudan has limited capacity to absorb external shocks. Foreign exchange reserves have remained critically low, averaging about 0.5 months of import cover in recent years and falling to 0.3 months in fiscal year 2024.
This leaves the economy highly exposed, with even short disruptions triggering exchange rate depreciation, inflation, and fiscal stress. Inflation levels have been particularly severe, with the World Bank estimating 182.6 per cent inflation in fiscal year 2025, while the IMF placed it at around 143 per cent for the same period.
The country’s narrow revenue base further compounds the problem. Non-oil tax revenue is estimated at just 2 to 2.5 per cent of GDP, far below regional averages. This means that when oil revenues decline, there are few alternative sources of income to sustain government spending or stabilise the economy. The result is often abrupt fiscal tightening, salary arrears, and reduced economic activity.
Economists also caution that the large growth figures often associated with South Sudan reflect statistical effects rather than sustained expansion.
The projected 48.8 per cent growth in 2026, for instance, follows a steep contraction of 23.8 per cent in 2025, illustrating a classic “base effect.” When output falls sharply, even a partial recovery can produce very high growth rates in percentage terms without necessarily improving living standards.
Against this backdrop, the IMF’s 22.4 per cent growth projection for 2026 appears less as a guaranteed outcome and more as a scenario dependent on a narrow set of assumptions, including uninterrupted oil exports, improved fiscal management, and relative political stability. Past data suggest that when any of these conditions falter, projections are quickly revised.
Taken together, the evidence points to a structural pattern rather than isolated forecasting errors. South Sudan’s economy remains highly concentrated, vulnerable to external shocks, and constrained by weak fiscal buffers.
As a result, headline growth projections have repeatedly failed to translate into sustained, broad-based economic expansion, raising questions about how much of the anticipated growth will be felt beyond the statistics.
