IMF Staff Concludes Visit to Comoros for the 2019 Article IV Consultation and Discussions on Engagement in 2020
IMF News, December 20, 2019
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Bibliographic details
- Published: December 20, 2019
Mission overview and engagements
- Press Release No. 19/482; December 20, 2019.
- An IMF team, led by Hans Weisfeld, visited Comoros during December 11-20, 2019 to conduct 2019 Article IV consultations and discuss options for engagement in 2020.
- Meetings included President Azali Assoumani, Minister of Finance and Budget Said Ali Said Chayhane, Central Bank Governor Younoussa Imani, other high-level officials, private sector representatives, and the donor community.
Economic assessment and recent developments
- 2019 characterized as a challenging year for Comoros’ economic development, driven by the negative impact of Cyclone Kenneth (struck in April) and difficulties at several state-owned enterprises.
- Key 2019 indicators and assessments:
- Growth for the year as a whole is projected to fall to about 1.9 percent.
- Inflation remains contained (at 3.3 percent).
- Fiscal revenue as a share of GDP fell, driven by the impact of the cyclone on the economy and difficulties at several state-owned enterprises.
- Growth of credit to the private sector remained weak, due in part to a challenging operating environment for banks.
Near-term outlook
- For 2020:
- Growth is expected rebound to 4-4½ percent.
- Inflation should come down (to below 2 percent).
- Difficulties in several state-owned enterprises will likely continue to weigh on fiscal revenue.
Policy recommendations and reform priorities
- Institutional reforms to address fragility:
- Strengthen the civil service.
- Enhance governance.
- Reinforce the judicial system to better protect property rights and help private parties enforce contracts.
- Economic measures to address fragility and support emergence:
- Create fiscal space and use it to raise investment in both physical and human capital, including through higher social spending.
- Lessen vulnerability to shocks such as natural disasters.
- To create fiscal space, raise fiscal revenue, for example by reducing tax exemptions and registering more taxpayers.
Next steps and engagement
- The IMF team discussed options for engagement with the Comoros authorities in 2020.
- IMF mission expressed thanks to the authorities for constructive discussions and warm hospitality.
Source: IMF Press Release No. 19/482, December 20, 2019.