IMF Staff Concludes Visit to Comoros for the 2019 Article IV Consultation and Discussions on Engagement in 2020
December 20, 2019
End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF’s Executive Board for discussion and decision.
- 2019 has been a challenging year for Comoros economic development, driven by the negative impact of cyclone and difficulties at several state-owned enterprises.
- However, growth is expected rebound to 4-4½ percent in 2020, while inflation should come down to below 2 percent.
- The IMF team also discussed options for engagement with the Comoros authorities in 2020.
An International Monetary Fund (IMF) team, led by Hans Weisfeld, visited Comoros during December 11-20, 2019, to conduct 2019 Article IV consultations and discuss options for engagement with the Comoros authorities in 2020.
At the end of the visit, Mr. Weisfeld issued the following statement:
“The IMF team discussed with the authorities of the Union of the Comoros the country’s economic conditions and the government’s economic policies. Discussions focused on a medium-term strategy to lift the country out of fragility and boost inclusive growth.
“Economic developments in 2019 have been challenging, notably after Cyclone Kenneth struck in April. Growth for the year as a whole is projected to fall to about 1.9 percent, while inflation remains contained (at 3.3 percent). Fiscal revenue as a share of GDP fell as well, driven by the impact of cyclone on the economy and difficulties at several state-owned enterprises. Growth of credit to the private sector remained weak, due in part to the fact that the operating environment for banks remains challenging.
“For 2020, as the impact of the cyclone eases, growth is expected rebound to 4-4½ percent, while inflation should come down (to below 2 percent). The difficulties in several state-owned enterprises will likely continue to weigh on fiscal revenue.
“To reach emergence, the mission recommended addressing both the institutional and economic aspects of fragility. Key reform actions in the institutional sphere include strengthening the civil service, enhancing governance, and reinforcing the judicial system to enable it to better protect property rights and help private parties enforce contracts.
“Addressing economic fragility includes creating fiscal space; using this space to raise investment in both physical and human capital, including through higher social spending; and lessening vulnerability to shocks such as natural disasters, to which Comoros is highly exposed. To create fiscal space, it will be essential to raise fiscal revenue, for example by reducing tax exemptions and registering more taxpayers.
“The IMF team also discussed options for engagement with the Comoros authorities in 2020.
“The team met with President Azali Assoumani, Minister of Finance and Budget Said Ali Said Chayhane, Central Bank Governor Younoussa Imani, and other high-level officials, as well as representatives of the private sector and the donor community.
“The IMF mission thanks the authorities for the constructive discussions and their warm hospitality.”
IMF Communications Department
PRESS OFFICER: Gediminas Vilkas
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