November 13, 2011 / 1:33 PM / in 6 years

Sudan inflation eases to 19.8 pct in October but stays high

KHARTOUM (Reuters) - Annual inflation in Sudan eased to 19.8 percent in October from 20.7 percent in September as some food costs fell slightly while overall price levels remained high, hitting ordinary people coping with an economic crisis.

A vegetable vendor waits for customers at his shop in Khartoum, Sudan May 12, 2011. REUTERS /Mohamed Nureldin Abdallah

Analysts say food inflation could stoke dissent against a background of unemployment, a devalued local currency and U.S. trade sanctions.

Several protests against inflation have reently taken place in the capital Khartoum.

Inflation has more than doubled since the government effectively devalued the Sudanese pound in November to curb black market activity -- a measure that had no success.

Month-on-month inflation eased by 2.3 percent in October as costs for several food items fell, the Central Bureau of Statistics said in its monthly bulletin on Sunday. Food makes up more than half the consumer price index.

Prices of meat fell 9 percent in October compared with September after the government vowed to bring down prices following a rare call by a consumer protection society to stop buying meat for several days in September.

On an annual basis, meat prices were still up 26 percent in October. Fruit costs fell 13.9 percent in October compared with September but are up 14.3 percent on an annual basis.

Sudan is undergoing a severe economic crisis after losing 75 percent of the country’s 500,000 barrels a day of oil production when South Sudan seceded in July after a 2005 peace deal.

Both sides used to share oil revenues -- the lifeline for both economies. The South will have to pay usage fees for northern oil export facilities but what the north earns is likely to be much less than the 50 percent it received previously, analysts say.

Adding to economic woes, violence in the region bordering South Sudan -- major cattle markets -- is affecting the economy.

Annual inflation in South Kordofan state, where the army is fighting armed groups, was 34.8 percent in October after 32.8 percent in September.

In neighbouring Blue Nile state, which is also the scene of heavy fighting, inflation was 30.4 percent in October, easing from 34.1 percent in September.

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