Burundi - Poverty reduction strategy paper : preparation status report and joint staff advisory note
Perotti, Enrico
The purpose of this progress report is to update information on (1) implementation of the interim Poverty Reduction Strategy Paper (PRSP), (2) progress made in drawing up the full PRSP, and (3) the revised schedule and budget for drawing up the full PRSP. Despite a difficult political environment, considerable progress has been made in restoring macroeconomic and financial stability, reviving the economy, and resuming international trade. Economic recovery has been strengthened by good prospects for coffee production. Economic growth came in slightly below 5 percent in 2004. The cost of living was affected by inflationary pressures related to the increase in the prices of petroleum products and the drought in the north of the country. The rate of inflation remained slightly higher than 10 percent at end-2004. Despite the government's efforts to improve tax receipts and control expenditures, the general government budget remained in deficit, notably because of outlays for programs implementing the Arusha Peace and Reconciliation Agreement and external debt service. This deficit was allowed for within the budget framework of 2004. Within the framework of the government's goals to promote private sector-driven growth, the coffee and sugar sectors were liberalized. By contrast, as regards the fight against poverty, social indicators show an overall trend towards the deterioration of peoples' living conditions. Access to basic social services continues to be inadequate, while vulnerable populations have seen their situation stagnate even more. To reverse this trend, the government has reallocated budget resources for current expenditures to the social sector, and to the health sector in particular.
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