Democratic Republic of the Congo - Selected Issues and Statistical Appendix (Electronic book text)

1. The economic recovery of this fragile post-conflict country is being threatened by an abrupt deterioration in the DRC's terms of trade following the global financial crisis. Over the past several years, the return of peace to most of the country and the transition to a democratically elected government helped lay the foundation for economic growth, led in part by robust mining activity. Despite periodic policy slippages, inflation was kept at moderate levels and gross foreign reserves increased, though from very low levels. However, the rapid deterioration in world commodity prices and the escalation of the conflict in the eastern provinces resulted in a deterioration of the fiscal and external accounts, particularly a dramatic reduction in gross official reserves. Because of the sudden and significant terms of trade shock, the authorities are requesting a disbursement from the RAiESF in an amount up to 25 percent of quota (SDR 133.25 million, about US$200 million).