BANGUI, Dec 29 (Reuters) - Central African Republic's parliament has approved a 45 percent budget increase for 2017, as the government bets that a gradual return to peace will boost development despite thousands of people still displaced by violence and attacks persisting.
Central African Republic descended into chaos in 2013 when mainly Muslim Seleka rebels seized power in the majority Christian nation, toppling President Francois Bozize and wreaking havoc on the country's fragile economy.
Despite continuing tensions, economic activity picked up this year, according to an International Monetary Fund report in September, including in the coffee, cotton and forestry sectors. The IMF expects the economy to grow 5.2 percent in 2016.
The 2017 budget, passed by a large majority in parliament late on Wednesday, is set at 237.23 billion CFA francs ($378.33 million), up from 164 billion CFA francs in 2016. Revenues are expected to hit 203 billion CFA francs and expenditures 237 billion CFA francs.
A plan to bridge the 34 billion CFA franc deficit will be discussed, the government said. It has given no details on how it will achieve that, other than it will make up the shortfall by finding more funding internally.
Obstacles remain for long term economic recovery, despite the election of President Faustin-Archange Touadera in February, which raised hopes for reconciliation and stability after a wave of ethnic cleansing and the nation's de facto partition into a Muslim northeast and Christian southwest.
However, a United Nations report in December said that violent clashes in the country are spreading and that Toudera's lack of control outside the capital Bangui has made it difficult to convince dozens of armed factions to lay down their weapons. ($1 = 627.0500 CFA francs) (Reporting by Crispin Dembassa-Kette; Writing by Edward McAllister; Editing by Alison Williams)