June 3, 2012 / 2:08 PM / 7 years ago

South Sudan inflation soars to nearly 80 pct in May

* Spike driven by food, non-alcoholic beverages

* Economy struggling after oil shutdown

* Crude was main source of dollars for new nation

JUBA, June 3 (Reuters) - Annual inflation in South Sudan shot up to nearly 80 percent in May, official data showed on Sunday, highlighting the grave economic challenges the world’s newest nation is facing less than a year after gaining independence.

Sharp rises in the costs of food and non-alcoholic beverages helped fuel the increase, South Sudan’s National Bureau of Statistics said in a monthly report on its website.

The central African country seceded from Sudan in July, sparking widespread hope among South Sudanese that their nation would be able to steer toward prosperity after decades of devastating civil war.

But stubborn disputes between Juba’s rebels-turned-politicians and their former masters in Khartoum have hammered the economy since then, hefting additional hardships on people already exhausted by the conflict.

South Sudan, which is landlocked, shut off its entire oil output of around 350,000 barrels per day in January amid a dispute with Khartoum over how much it should pay to transport crude through pipelines in Sudan to a Red Sea terminal.

Oil accounted for about 98 percent of the fledgling state’s revenues and was almost its only source of foreign currency. The sudden loss of dollars from exports helped drive up the prices of food and fuel, which is imported from neighbouring countries.

The prices of food and non-alcoholic beverages in South Sudan’s consumer price index rose about 84.7 percent compared to last year, mainly driven by increases for fruit, vegetables, bread and cereals, the report said.

Tobacco and alcoholic beverage prices nearly tripled compared to the previous year.

Restaurant and hotel prices rose 48.1 percent year-on-year, while transport costs were up 68 percent, it added.

The overall rise in the index compared to May, 2011, was 79.5 percent, against annual inflation of 29.6 percent in April.

Some economists doubt the accuracy of official data and estimate prices have actually risen much faster in some parts of South Sudan, particularly in northern border regions, where a disruption of supply routes from Sudan has forced many traders to start bringing in goods from Uganda and Kenya on dirt roads. (Reporting by Alexander Dziadosz; editing by Ron Askew)

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