World Bank2025-03-192025-03-192025-03-19https://hdl.handle.net/10986/42974South Sudan’s socio-economic outcomes have worsened over the past decade due to recurrent conflicts, fragility, and macroeconomic mismanagement compounded by global economic and climate shocks. Even before the oil shock of early 2024, per capita gross domestic product had dropped by 18 percent relative to its 2015 level, with prices rising 93-fold over this period. The erosion in living standards has left three in four people in poverty as of 2022. This dire situation is the result of (i) nascent institutions and weak governance; (ii) persistent mismanagement of the country’s abundant natural capital, namely, oil; and (iii) recurrent community-level conflicts and violence that led to nationwide armed conflict in 2016 and localized ongoing conflict after the 2018 peace agreement. Overlapping exogenous shocks such as the COVID-19 pandemic and historic flooding have also impeded economic recovery. Macroeconomic policy challenges, characterized by the need for stronger monetary and fiscal policy frameworks and improved policy coordination, have contributed to economic imbalances and increased vulnerability to shocks. A complex global economic outlook presents heightened risks for South Sudan and underscores the need for immediate action. Escalating conflicts and geopolitical tensions, increased inflation, and slower economic growth in the world’s major economies pose substantial risks to the global outlook. Additionally, potential reductions in global aid and humanitarian support may have material consequences, as South Sudan is a large recipient of aid amounting to an estimated annual average of 23.8 percent of GDP during 2020-24.3 Against this challenging background, South Sudan is at a critical juncture in its development trajectory and the government has a decision to make about the economic path it chooses as the country moves forward.en-USCC BY-NC 3.0 IGOOIL PRODUCTIONOIL EXPORTCONFLICTINFLATIONPOVERTYReportWorld Bank10.1596/42974