Union of the Comoros: Second Review Under the Staff-Monitored Program-Press Release; and Staff Report
IMF Staff Country Reports, April 20, 2023
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- Union of the Comoros: Second Review Under the Staff-Monitored Program-Press Release; and Staff Report
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Bibliographic details
- Published: April 20, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400240751.002
Implementation of the Staff-Monitored Program (SMP)
- SMP supported the government’s reform program during 2021–2022.
- Implementation of the SMP was broadly satisfactory, with most quantitative targets and structural benchmarks being met on time.
- IMF welcomes the authorities’ commitment to continuing engagement with the IMF country and technical assistance teams as they push forward the remaining structural benchmark and tackle other structural reforms.
Public enterprises, administered prices, and fiscal impact
- State-owned enterprises (SOEs) incurred substantial losses in 2022 as administered prices were slow to adjust to the surge in global commodity prices.
- Fiscal implications of SOE losses:
- lower fiscal revenue,
- higher public debt,
- wider financing gaps over the medium term.
Debt sustainability and financing gaps
- Comoros was already facing a high risk of debt distress and substantial financing gaps due to:
- large projects financed by nonconcessional debt,
- the restructuring of the insolvent state-owned postal bank (SNPSF).
- The recent deterioration in macroeconomic conditions has further heightened debt sustainability risks.
External sector developments and cushioning factors
- The reported number of coronavirus disease 2019-related cases has remained relatively low.
- Strong remittances and a resumption of tourism have helped cushion the shock while maintaining an adequate level of foreign reserves.
- The fallout from the war in Ukraine has set back the expected fiscal gains, underscoring the need for continued fiscal consolidation efforts.
Key takeaways and policy direction
- Continued fiscal consolidation is needed to restore and preserve debt sustainability in light of:
- SOE losses in 2022,
- preexisting high risk of debt distress,
- substantial financing gaps from nonconcessional borrowing and SNPSF restructuring,
- macroeconomic deterioration following global shocks (including the war in Ukraine).
- Continued engagement with IMF country and technical assistance teams is emphasized to implement remaining structural benchmarks and other structural reforms.
Source: Union of the Comoros: Second Review Under the Staff-Monitored Program-Press Release; and Staff Report (April 20, 2023).
Content in this bundle
- Executive Summary