The report by the Council of Ministers said Sudan's inflation rate dropped to 8.5 percent in 2004, from 12 percent and 10 percent in 1998 and 2000 respectively.

But the country's external loans and grants increased from 28 million US dollars in 2000 to 193.4 million US dollars in 2004.

Spending on development items, the report said, reached 857 million dollars in 2004 compared to 143 million dollars in 2000 and 382 million dollars in 1989.

From 1997, Sudan has been implementing IMF macro-economic reforms and the country began exporting crude oil and in the last quarter of 1999, thereby recording its first trade surplus.

The increased oil production expanded the country's export processing zones and helped to sustain Gross Domestic Product (GDP) growth at 6.1 percent in 2003 and 7.2 percent in 2004, the report added.

Agriculture remains Sudan's most important sector, employing about 80 percent of the workforce and contributing 39 percent of the GDP, although most farms remain rain-fed and susceptible to drought.

Also, due to chronic instability, with a prolonged war South and recently in Western Darfur region, coupled with adverse weather and weak world agricultural prices, means much of the population could remain at or below the poverty line for years, according to economic experts.

(250 dinars=1USD)