Sudan Conflict Deals New Blow to Stagnant Economy

Sudanese residents shop in a bazaar in Khartoum, Sudan, May 4, 2019. REUTERS/Umit Bektas/File Photo
Sudanese residents shop in a bazaar in Khartoum, Sudan, May 4, 2019. REUTERS/Umit Bektas/File Photo
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Sudan Conflict Deals New Blow to Stagnant Economy

Sudanese residents shop in a bazaar in Khartoum, Sudan, May 4, 2019. REUTERS/Umit Bektas/File Photo
Sudanese residents shop in a bazaar in Khartoum, Sudan, May 4, 2019. REUTERS/Umit Bektas/File Photo

The conflict shaking Sudan has dealt a crippling blow to the heart of the country's economy in the capital Khartoum, as well as disrupting internal trade routes, threatening imports and triggering a cash crunch.

Across swathes of the capital factories, banks, shops and markets have been looted or damaged, power and water supplies have been failing, and residents have reported steep price rises and shortages of basic goods.

Even before the fighting between military factions broke out on April 15 Sudan's economy had been in deep stagnation following a crisis stretching back to the last years of Omar al-Bashir's rule and turmoil after his overthrow in 2019, Reuters said.

Tens of thousands have now fled the violence in Khartoum and its sister cities of Bahri and Omdurman, while millions more have sheltered at home as shelling and air strikes rattle across neighborhoods.

Transport of goods and people has slowed as troops and sometimes gangs roam the streets. Telecom networks have become unreliable and some say they have begun rationing food and water.

"We are afraid, and we are suffering from high prices, shortages, and lack of salaries. This is a war on the citizen," said Ismail Elhassan, an employee at one Khartoum business.

Sudan, already an important exporter of gum arabic, sesame, peanuts, and livestock, has the potential to be a major agricultural and livestock exporter and logistics hub.

But the economy has been held back by decades of sanctions and international isolation, as well as deep corruption. Most Sudanese have struggled with years of rampant inflation, sharp currency devaluations and sliding living standards. About a third of the 46 million population depends on humanitarian aid.

NO DRIVERS

The conflict has hampered trade flows in and out of the East African nation, since banking and customs procedures are centralized in Khartoum. While the country's main port on the Red Sea is operating, at least one big shipping company, Maersk, says it has stopped taking bookings until further notice.

Imports of wheat, key to Sudan's food security, are becoming more difficult, said one Khartoum-based trader. Imports of white goods such as refrigerators across the land border with Egypt, where tens of thousands of Sudanese have fled northwards, have also slowed, said Federation of Egyptian Chambers of Commerce secretary-general Alaa Ezz.

Michel Sidhom, a supply chain manager at a trading company operating in Egypt and Sudan, said its business in Sudan had "completely stopped" as exports of Egyptian fertilizers and flour, typically about 10,000 tons per month each, were halted.

Egypt, Sudan's second biggest destination for livestock, a key export, said it is looking to diversify its sources as a result of the unrest.

Sidhom says his company's traders in Sudan have left Khartoum, and no drivers are willing to risk transporting their goods to the capital city.

"They shut down and left Khartoum until further notice. Whoever stays in Khartoum stays in a battlefield," he said.

SCARCITY, HIGH PRICES

Shortages of items such as flour and vegetables have been reported in Khartoum along with price hikes. Long queues form in front of bakeries and supermarkets in the capital.

The price of one kilogram of lamb has jumped nearly 30% to 4,500 pounds ($7.52), according to a Reuters reporter, while the price of a kilogram of tomatoes doubled to 1,000 pounds ($1.67).

A supermarket owner in Omdurman blamed the inflation on soaring black market fuel prices. A gallon of scarce fuel can now cost as much as 40,000 pounds ($67), up from 2,000 pounds ($3.34).

Even in places where fighting has abated demand is low, said one Omdurman butcher. "Everyone's left," he said.

Sudan's pound has lost about 600% against the dollar since 2018, prompting many to save money in dollars.

Traders in Khartoum face a cash crunch, and people are increasingly dependent on an electronic wallet app known as Bankak, which often suffers outages, to pay bills.

The black market has become distorted, as relatives abroad seek to sell dollars for Bankak transfers, while those in the country seek dollars for safe keeping.

Currency traders offer dollars at rates as high as 700 pounds ($1.17), while buying at as little as 300 pounds ($0.5014), with prices varying widely as transport and communication becomes more difficult.

Sudan's central bank on Sunday said banks outside the capital were carrying out withdrawal and deposit transactions. Within Khartoum, the army and RSF have accused each other of looting banks. The head of one Khartoum bank said he was trying to temporarily move the bank's headquarters outside the capital.

Another executive said that in years of economic reforms, coups, and protests, "this is the biggest challenge to face the banking system, and threatens an almost complete shutdown," he said.

In the city of Atbara, north-east of Khartoum, crowds of people were seen outside of banks, some of which had imposed withdrawal limits.

"My cash has run out because I haven't received my salary and the banking apps don't work," said Elhassan, speaking from Khartoum.



IMF Upgrades Outlook for Surprisingly Resilient World Economy to 3.3% Growth this Year

FILE PHOTO: A view of the International Monetary Fund (IMF) logo at its headquarters in Washington, D.C., US, November 24, 2024. REUTERS/Benoit Tessier//File Photo/File Photo
FILE PHOTO: A view of the International Monetary Fund (IMF) logo at its headquarters in Washington, D.C., US, November 24, 2024. REUTERS/Benoit Tessier//File Photo/File Photo
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IMF Upgrades Outlook for Surprisingly Resilient World Economy to 3.3% Growth this Year

FILE PHOTO: A view of the International Monetary Fund (IMF) logo at its headquarters in Washington, D.C., US, November 24, 2024. REUTERS/Benoit Tessier//File Photo/File Photo
FILE PHOTO: A view of the International Monetary Fund (IMF) logo at its headquarters in Washington, D.C., US, November 24, 2024. REUTERS/Benoit Tessier//File Photo/File Photo

An unexpectedly sturdy world economy is likely to shrug off President Donald Trump's protectionist trade policies this year, thanks partly to a surge of investment in artificial intelligence in North America and Asia, the International Monetary Fund said in a report out Monday.

The 191-nation lending organization expects that global growth will come in at 3.3% this year, same as in 2025 but up from the 3.1% it had forecast for 2026 back in October, The Associated Press reported.

The world economy "continues to show notable resilience despite significant US-led trade disruptions and heightened uncertainty,'' IMF chief economist Pierre-Olivier Gourinchas and his colleague Tobias Adrian wrote in a blog post accompanying the latest update to the fund's World Economic Outlook.

The US economy, benefiting from the strongest pace of technology investment since 2001, is forecast to expand 2.4% this year, an upgrade on the fund's October forecast and on expected 2025 growth — both 2.1%.

China — the world's second-largest economy — is forecast to see 4.5% growth, an improvement on the 4.2% the IMF had predicted October, partly because a trade truce with the United States has reduced American tariffs on Chinese exports.

India, which has supplanted China as the world's fastest-growing major economy, is expected to see growth decelerate from 7.3% last year (when it was juiced by an unexpectedly strong second half) to a still-healthy 6.4% in 2026.


France Says Still Loyal to Syria Kurds, Hails Ceasefire

Syrian army personnel celebrate as government forces enter Raqqa city following the withdrawal of Syrian Democratic Forces, in Raqqa, Syria, January 18, 2026. REUTERS/Karam al-Masri
Syrian army personnel celebrate as government forces enter Raqqa city following the withdrawal of Syrian Democratic Forces, in Raqqa, Syria, January 18, 2026. REUTERS/Karam al-Masri
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France Says Still Loyal to Syria Kurds, Hails Ceasefire

Syrian army personnel celebrate as government forces enter Raqqa city following the withdrawal of Syrian Democratic Forces, in Raqqa, Syria, January 18, 2026. REUTERS/Karam al-Masri
Syrian army personnel celebrate as government forces enter Raqqa city following the withdrawal of Syrian Democratic Forces, in Raqqa, Syria, January 18, 2026. REUTERS/Karam al-Masri

France on Monday welcomed a ceasefire between the Syrian government and Kurdish-led forces and stressed it remained loyal to the latter who spearheaded the battle against the ISIS group.

"France is faithful to its allies," the foreign ministry said, urging all sides to respect the ceasefire deal, which will also see the Kurdish administration and forces integrate into the state after months of stalled negotiations.


Lucid in 2026: 'Made in Saudi Arabia' Label Goes Global

Mark Winterhoff, interim CEO of Lucid (Company) 
Mark Winterhoff, interim CEO of Lucid (Company) 
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Lucid in 2026: 'Made in Saudi Arabia' Label Goes Global

Mark Winterhoff, interim CEO of Lucid (Company) 
Mark Winterhoff, interim CEO of Lucid (Company) 

Saudi Arabia is positioning itself as a global launchpad for Lucid, the electric-vehicle manufacturer, not merely as a consumer market, but as a manufacturing and export hub serving markets worldwide.

Speaking from Riyadh during his participation in the Future Minerals Forum, Mark Winterhoff, interim chief executive officer of Lucid — whose largest shareholder is Saudi Arabia’s Public Investment Fund (PIF) — outlined the company’s next phase, which focuses on disciplined expansion, resilient supply chains, and a strategic shift from ultra-luxury vehicles toward a broader consumer segment.

In remarks to Asharq Al-Awsat, Winterhoff described the forum as a critical platform for the electric-vehicle industry, given its heavy reliance on minerals and rare earth elements, particularly those used in magnets. He praised Saudi Arabia’s leadership in this area, noting its direct impact on multiple industrial sectors. Winterhoff oversees the execution of Lucid’s strategy and leads teams responsible for product design, engineering, and manufacturing efficiency.

Saudi Arabia as an Export Base

Winterhoff said Lucid’s Saudi factory - the company’s first manufacturing facility outside the United States - was designed from the outset as a major export platform, not solely to meet domestic demand.

Under current plans, only 13 to 15 percent of production will be allocated to Gulf Cooperation Council (GCC) markets, with the majority destined for export. He confirmed that Lucid remains on track to begin production at the facility by the end of this year, specifically in December.

In January 2025, Lucid joined the “Made in Saudi Arabia” program, enabling it to use the national manufacturing label on vehicles produced locally. The company is the first automotive original equipment manufacturer (OEM) to receive the designation, reflecting Saudi Arabia’s push to localize advanced industries, deepen partnerships with global manufacturers, and establish itself as a hub for electric-vehicle production and exports.

Strong Growth Momentum

Winterhoff said Lucid posted strong growth in both production and deliveries in 2025. Annual production more than doubled, while deliveries rose 55 percent year-on-year. The fourth quarter recorded particularly strong results in the United States and the Middle East, especially Saudi Arabia.

He noted that Lucid was the only electric-vehicle manufacturer in the US to report higher deliveries in the fourth quarter of 2025, at a time when many competitors saw sharp declines.

According to company figures, Lucid produced about 18,378 vehicles in 2025, up 104 percent from 2024, while deliveries reached 15,841 vehicles. In the fourth quarter alone, production climbed to 8,412 vehicles — up 116 percent from the previous quarter — while deliveries rose 31 percent to 5,345 vehicles.

While Lucid currently operates in the luxury segment, its most significant strategic shift involves developing a mid-size vehicle priced at around $50,000. Winterhoff said this model, aimed at a much wider consumer base, will form the backbone of production at the Saudi plant and enable the facility to reach its targeted maximum capacity.

Supply Chain Challenges and Outlook

Winterhoff identified supply chains - particularly for minerals, rare earth elements, and semiconductors - as ongoing challenges for the industry. He said Lucid faced repeated difficulties over the past year in sourcing magnets and securing stable semiconductor supplies. Forums such as the Future Minerals Forum, he added, are part of the solution, helping build a more stable and sustainable resource ecosystem.

Looking ahead, Winterhoff expressed confidence in Lucid’s trajectory. The company currently leads US electric-vehicle sales in the luxury sedan segment and ranks third when internal combustion vehicles are included. With the launch of its mid-priced model, Lucid expects higher production volumes and, in 2026, plans to enter the autonomous robotaxi market, an emerging sector it views as a key source of future growth.