CENTRALAFRICAN REP.
Table 1

2023

Population, million

5.7GDP, current US$ billion

2.6

GDP per capita, current US$460.3

International poverty rate ($2.15)

a65.7
a85.8

a96.2

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

Key conditions andchallenges

a43.0

School enrollment, primary (% gross)b110.7b53.9

Total GHG emissions (mtCO2e)55.9Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2021), 2017 PPPs.
b/ WDI for School enrollment (2017); Life expectancy(2021).

Economic growth is estimated to havereached 0.9 percent in 2023, compared to0.5 percent in 2022. CAR's structural vulnerabilities, compounded by external
shocks, continue to strain public finances
and adversely affect growth, food security,and poverty reduction efforts, necessitatingbold macro-fiscal reforms. As of 2023, twothirds of the population lived in extreme
poverty, with projections suggesting a one
percentage point increase in the next twoyears due to negative per capita growth.

Since 2020, CAR’s macro-fiscal vulnerabilities have been exacerbated by a series of exogenous shocks (renewed insecurity and violence, COVID-19 pandemic and Russian invasion of Ukraine).
These shocks have strained public finances, added inflationary pressures,
jeopardized food security, and slowed
poverty reduction efforts. Also, climate
shocks, including drought and floods,
continue to pose threats to an alreadyalarming humanitarian situation, particularly in remote areas. As of December
31, 2023, the total number of internallydisplaced persons (IDPs) was estimatedat 511,803 individuals, while approximately 754,421 people were registered as
refugees in neighboring countries.
The private sector continues to behampered by unattractive businessconditions and high borrowing costs.
Employment opportunities remain extremely limited while the workforce isgrowing. Continued efforts by country
authorities to promote more inclusive
and resilient growth will be critical.
This includes improving the businessenvironment and state-owned enterprise (SOE) governance to attract private investment, improving revenue
mobilization to restore fiscal sustainability, and rationalizing untargeted
subsidies to create space for higher
social spending.

Recent developments
Economic growth was estimated at 0.9 percent in 2023, a slight increase from 0.5 percent in 2022, as a result of limited fuel supply and mixed agricultural performance.
Limited fuel supply has contributed tohigher transportation prices and disrupted
trade and local production. Production ofdiamonds, one of the country’s most important commodity exports, fell by 6.7 percent in FY2022/23 due to the decline of international demand for natural diamonddue to synthetic diamond surge. However,a shift of artisanal miners from the diamondto the gold sector and a relative rise in theprice of gold helped to boost the productionof gold. Official timber and sawn wood production would have increased in 2023, drivenbyimprovementsinsecurityconditions,secured contracts with key bilateral partners, and a slight rebound in international
prices for logs and sawn wood. Persistent
power shortages continued to hold back theindustrial sector while the services sector
suffered from higher transportation prices.
Despite rising transportation costs, inflation
fell from 5.6 percent in 2022 to 3.0 percent in2023,itslowestlevelsince2021.
Tight budget constraints due to lack ofgrowthandelevatedtransportationpricesreduced households’ purchasing power, worsened food insecurity, and slowed poverty reduction efforts. Poverty remains elevated,with an estimated 65.9 percent of the population living in extreme poverty in 2023
(i.e., below the international poverty lineof US$2.15 per person per day, 2017 PPP).

FIGURE 1 Central African Republic / Real GDP growthand contributions to real GDP growth

FIGURE 2 Central African Republic / Actual and projectedpoverty rates and real GDP per capita

Percent, percentage points
5Poverty rate (%)

490

380

270

160050-140-230-320-4

102021

2022

Real GDP per capita (constant LCU)

100

2023

Private consumption
Gross fixed investment
GDP (market price)

2024

2025

300000250000200000150000100000
50000

02026

02008 2010 2012 2014 2016 2018 2020 2022 2024 2026

Government consumption
Net exports

Source: World Bank.

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

MPO1Apr 24The extreme poverty rate is set to increase by
one percentage point over the next twoyears, due to negative per capita growth.
The Bank of Central African States (BEAC)
maintained its tight monetary policy
stance during 2023 to contain inflationarypressures and support the external viability of the exchange rate arrangement. TheBEAC policy rate was maintained at five
percent following a cumulative increase by
175 basis points between November 2021
and March 2023. Weekly liquidity injections were discontinued in early 2023 andBEAC stepped up its liquidity absorptionoperations. CAR’s indicators of financial
soundness remain broadly adequate, although the non-performing loan ratio deteriorated and stood at 16.4 percent in2023, compared to 15.5 percent in 2022.
While the overall fiscal balance continued
to improve in 2023, it remained structurally in deficit. Fuel shortages during the lastquarter of 2023 reduced petroleum tax collection and dampened recent tax recovery
efforts. Domestic revenue mobilization(DRM) efforts, including the implementation of the new tax on electronic communications, combined with moderation of current spending and expanded external
grant financing enabled a reduction in theoverall fiscal balances in 2023. Public debt
increased to 55.7 percent of GDP in 2023 in
the form of issuance of net domestic bonds.

In 2023, domestic debt is estimated toreach 21 percent of GDP. Yields on 3-year
issuances have hovered around 11 percent,among the highest in CEMAC.
The current account deficit improved to 9
percent of GDP in 2023, mainly due to a 14.4
percent improvement in the terms of trade.
However, a lack of competitiveness, coupled with commodity price shocks and aweak linkages with global value chains, continued to weigh on the external position.

OutlookThe medium-term outlook shows gradualimprovement in economic performancebut is vulnerable to headwinds. Real GDP
growth is projected to recover gradually,reaching 1.3 percent in 2024 before averaging 1.8 percent in 2025-26, partly due tothe base effect and contingent on the second disbursement of budget support fromthe African Development Bank (AfDB) andthe implementation of policy adjustments
to pave the way for improved fuel supply.
Inflation is expected to be above the regional ceiling in 2024 and remain elevatedin the medium term. Poverty is expected toremain high due to declining per capita income, relatively high food prices, and theweak economic recovery.

TABLE 2 Central African Republic / Macro poverty outlook indicators

The overall fiscal balance is projected togradually improve from 2024 to 2026, provided that DRM efforts continue, particularly in improving the collection of taxes, especially VAT, and miscellaneous revenues
through a treasury single account (TSA) system. Under these circumstances, domestic
revenue could reach pre-war levels for the
first time in 2026. The country is expected toremain at high risk of external debt distressand overall debt distress, although public
debtisprojectedtoremainsustainable.
The current account balance is projected to
improve but remain in significant deficit.
Thebalanceofpaymentsisprojectedtoshow
a financing gap of roughly 1 percent of GDP
peryearinthemediumtermwhichwouldbe
coveredbybridgefinancingfromtheregional market, possible disbursements of budget
support from donors, and disbursements
undertheIMF’songoingECFprogram.
Risks to the outlook remain tilted to thedownside and include: (i) a reversal of security gains that could jeopardize economic growth and the pathway out of fragility;(ii) persistent pressure on food and transportation prices that could slow down
poverty reduction efforts; (iii) failure to implement bold and agreed policy reforms
under the ECF program, which could delay expected disbursements, dampen
donor appetite for budget support andlead to a possible accumulation of arrears.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumptionGovernment consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
1.0
1.3
-3.8
-15.9
-5.3
-11.5

2022
0.5
0.0
-8.2
-4.5
2.6
-5.5

2023e
0.9
1.2
3.5
-1.5
9.0
5.5

2024f
1.3
3.3
-4.5
0.2
5.2
7.3

2025f
1.7
2.5
-4.4
9.8
9.0
9.9

2026f
1.9
2.7
-1.9
3.2
5.4
5.5

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

1.5
2.7
-1.7
2.2

1.0
2.2
-3.9
2.4

0.9
2.3
-0.5
0.51.3
2.5
1.3
0.3

1.7
2.9
1.8
0.6

1.9
3.1
2.1
0.9

Inflation (consumer price index)
Current account balance (% of GDP)

4.3
-11.1

5.6
-12.7

3.0
-9.0

4.7
-7.7

4.6
-6.7

3.8
-5.4

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-6.0
13.7
48.6
-5.7

-5.3
12.3
54.2
-4.9

-3.5
14.4
55.7
-2.9

-3.1
13.9
55.6
-2.2

-1.8
16.1
54.5
-0.9

0.1
18.2
50.7
0.9

65.7
85.8
96.265.3
85.6
96.1

65.9
86.2
96.4

66.2
86.1
96.4

66.8
86.7
96.5

67.3
87.1
96.7

0.6
0.4

0.1
0.4

0.0
0.4

-0.1
0.4

0.0
0.4

0.0
0.4

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2021-EHCVM. Actual data: 2021. Nowcast: 2022-2023. Forecasts are from 2024 to 2026.
b/ Projections using microsimulation methodology.
MPO2

Apr 24