Central African Republic Economy Grows Again, and Slowly
The African Development Bank says CAR grew 3.3% in 2025 and projects 2.9% for 2026, a fragile recovery for one of the world's poorest countries. The post Central African Republic Economy Grows Again, and Slowly appeared first on The Rio Times .
The Central African Republic's economy experienced a slight growth of 3.3% in 2025, according to the African Development Bank's 2026 country report. This modest improvement comes after a decline to 1.8% in 2024 and 0.7% in 2023. The bank projects continued growth, with 2.9% in 2026 and 3.9% in 2027. However, the bank emphasizes that the growth is insufficient to significantly improve living conditions or create employment opportunities for the majority of the population.
Three factors could hinder this growth: security, the availability of electricity, and the successful completion of planned projects in energy, transport, and agro-industry. Despite the limited statistical capacity of the country, the IMF estimated 2025 growth at 3.0%, highlighting the wide margins in national accounts.
The budget deficit narrowed to 3.5% of GDP in 2025, down from 5.1% in 2024, and the bank anticipates it to remain stable at that level in 2026 and decrease to 3% in 2027. Public debt, however, increased to 59% of GDP from 58%. The current account deficit improved, decreasing from 9% of GDP to 7.4%.
Inflation is expected to remain above the Central African Economic and Monetary Community's 3% target, indicating that domestic supply constraints, rather than currency weakness, are driving prices. The country relies heavily on extractive industries, which account for 92% of its exports, though they contribute only 2% to GDP and 6% to government revenue. Industrial logging and mining are also significant, with revenue potential estimated at 150 to 180 billion CFA francs, approximately US$263 million to US$316 million.
The country's export economy is unique, with almost everything sold being raw materials from within its borders, and very little of the value remaining within the state. The Extractive Industries Transparency Initiative has suspended the country temporarily due to issues with transparency and civil society participation. A new mining code was introduced in August 2024, and two state-owned mining companies were established in 2025.
Electricity access remains low, reaching only 18.2% of the population in 2024, compared to 17.6% in 2023 and 15.7% in 2022. This underscores the critical need for energy infrastructure, as a lack of access hinders the development of manufacturing and processing industries, which could help the country retain more of the value extracted from its resources.
The country uses the CFA franc, pegged to the euro, which provides stability but eliminates the ability to devalue and address competitiveness issues. Security remains the top concern, and the IMF acknowledged that improved security contributed to the economic recovery, albeit with substantial downside risks.
Written by urgent.news from The Rio Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
