By Valérie K.
The International Monetary Fund (IMF) completed on December 19, 2018, the fifth review of the Extended Credit Facility (ECF) agreement for the Central African Republic, and approved a disbursement of approximately $ 31.6 million. USD in his favor.
“The results obtained by the Central African Republic under the ECF-supported program have been satisfactory despite a difficult security environment and difficult humanitarian conditions. The authorities remain committed to maintaining fiscal policy consistent with macroeconomic stability, which is essential for economic growth and poverty reduction. The 2019 budget is anchored to the national primary balance target while allowing for an increase, “said Mitsuhiro Furusawa, the deputy director general and acting president of the fund.
Growth of 4.3% in 2017
Under consideration, the Board also conducted a 2018 Article IV consultation, and estimates the current account deficit at 8.3% of GDP in 2017. According to the information currently available, it will remain at a similar level in 2018. While the oil import bill will increase, the increase in lumber exports and the sale of stored diamonds will offset costs, impacting the trade balance.
Growth is estimated at 4.3% in 2017 and is expected to remain broadly unchanged under the impetus of a vibrant forestry sector, construction and externally financed investment projects, the committee said.
Downside risks
Inflation has fallen as a result of lower prices for food and manufactured goods. Growth could reach 5% in the medium term. However, the risks are down, mainly because of the unstable security situation. Projections are based on the progress of peace and reconciliation efforts under the African Union Initiative, the progressive extension of security forces and public services in the provinces and the resolute implementation of reforms.
Noting the high risk of over-indebtedness, the directors recommended to the Central African authorities to limit borrowing and instead seek to mobilize funding in the form of grants.
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