The impact of macroeconomic indicators on inflation in Sudan during the period from 2000-2022


  • Mohamed Abdalla Mohamed Ahmed

الكلمات المفتاحية:

Inflation, gross domestic product, macroeconomic indicators, exchange rate, government expenditure.


The paper aimed to study the impact of macroeconomic indicators on inflation in Sudan during the period from (2000-2022). The paper followed the econometrics approach through a linear regression model on time series data. The papers hypotheses were that there is a statistically significant relationship between the gross domestic product and government expenditure, and exchange rate on inflation. The paper reached the most important results, the most important of which is that the gross domestic product and exchange rate directly and positively affect the inflation rate, and that government expenditure inversely affects the inflation rate. The most important recommendations included the need to pay attention to reducing inflationary pressures with the aim of stopping the deterioration of the value of the Sudanese pound and then improving it. This can only be achieved by increasing the gross domestic product, which contributes to expanding the productive capacity of the economy, and reducing government expenditure on non-productive activities and increasing taxes to reduce inflation rates. The performance of macroeconomic indicators is considered a standard by which the economic performance of countries is measured. Therefore, we find that macroeconomic policies always work on To control the general level of prices by designing specific policies that reduce Inflation rates. Sudan, like other developing countries, has continued to suffer from the low performance of macroeconomic indicators, represented by an imbalance between aggregate demand and supply. In recent years, inappropriate economic policies have played a major role in the instability and high rates of inflation for long periods, even if their intensity varies from  period to another, The high rate of inflation in Sudan in recent years is attributed to structural problems that have been associated with the Sudanese economy, as the government’s growing expenditure has contributed greatly to the rise in inflation, especially since this spending is not matched by real production, as it is financed by borrowing from the Central Bank, as recent years have witnessed a rise the growth rates of money supply in Sudan are steady due to several factors, the most important of which is the increase in the general budget financing deficit, the increase in government expenditure, and the decrease in the state’s public revenues, as the fiscal deficit in 2019 reached 11% of the gross domestic product, and public revenues (excluding grants) reached 5.4% Only of GDP in 2020. So the budget deficit was financed by inflationary  Finance, which led to an increase in the inflation rate, reaching 60% in 2018, and it continued to rise until it reached 230% in October 2020.(Annual report of the Bank of Sudan, P. 35.2020). Therefore, what are the macroeconomic indicators that affect inflation rates in Sudan? And to what extent do these macroeconomic indicators affect inflation rates?  Based on these questions, the paper’s hypotheses were formulated as follows: