This public expenditure review (PER)aims to assist the government in its efforts to achieve atransition out of fragility through growth and development.Higher and sustained per capita real gross domestic product(GDP) growth to raise the income of the population andcreate employment is needed to reduce poverty and lower therisk of reversion to conflict. Significant productiveinvestments in human capital and in infrastructure areneeded to help Central African Republic (CAR) foster andsustain higher economic growth. Thus, the government needsto create fiscal space in the budget to finance its reformprogram and productive investments in health, education, andinfrastructure to spur growth. While the burden ofinvestment should be on the private sector the governmenthas a key role to play in facilitating private investmentand in providing the basic infrastructure that the privatesector needs as well as public services to the poor. The PERadvances the notion that public spending at the appropriatelevel, allocated to productive areas and used efficiently,will be essential to promote rapid and broad-based economicgrowth in CAR. More specifically, the PER examines thecentral question of how to create and use fiscal space inthe government budget to support long-term economic growthand poverty reduction in CAR while maintaining macro-fiscal stability.
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