The economy of the Central African Republic (CAR) grew at a slower pace in 2019 compared to 2018. Still, it grew at 3.1 percent, year-onyear, in 2019, above the average of regional peers (1.6 percent) and countries affected by fragility, conflict, and violence (FCV) (2.7 percent). Despite improvements in security following the signing of the peace agreement in February 2019, the economy performed worse than expected due to the collapse by about 30 percent in the production of coffee and cotton, which in turn was the result of persistent structural challenges in the agriculture sector. On the demand side, private consumption remained the main driver of economic growth, while the agriculture and services sectors drove growth on the supply side. Moreover, extreme poverty remains high and projected to affect 71 percent of the population—3.4 million people—in 2019. Inflation increased in 2019, and CEMAC’s monetary policy remained on track. The tightening of monetary policy, as well as progress on implementing the new Economic and Monetary Community of Central Africa’s (Communauté Économique et Monétaire de l’Afrique Centrale, CEMAC) foreign exchange regulation in March 2019, contributed to a strong recovery of gross foreign assets, from 2.7 months’ worth of imports in 2018 to 3.3 months in 2019. Inflation was contained at an average of 2.8 percent in 2019 as inflationary pressures from the blockade of the main trade route between Bangui and Cameroon in March abated. Fiscal stance improved, but CAR remains at high risk of debt distress. Public expenditure grew at a slower pace in 2019 than in 2018, mainly due to delays in public investments. Government revenues picked up at 18.4 percent of GDP in 2019 thanks to a significant increase in official grants. As a result, the overall fiscal situation improved in 2019, and the debt-to-GDP ratio continued to decline. However, CAR remains at high risk of debt distress, primarily due to low exports and mobilization of domestic resources.