COMOROSKey conditions andchallenges

Table 12023

Population, million

0.9GDP, current US$ billion

1.3

GDP per capita, current US$1520.5

International poverty rate ($2.15)

a18.6
a39.5

a68.6

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a45.3

School enrollment, primary (% gross)b106.2

b63.4

Total GHG emissions (mtCO2e)0.7Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2014), 2017 PPPs.
b/ Most recent WDI value (2021).

The Comoros’ economy continues to recover following the resumption of private
consumption and investments in tourism
and transport infrastructure. Growth isexpected to average 3.9 percent over2024-26, compared to 2.8 percent in2022-23. The poverty rate has remained
high at 38.2 percent (using the lower
middle-income poverty threshold). Policy
priorities include fiscal consolidation andreforms to improve financial intermediation, and enhance the business climate
and access to basic services.

Economic growth slowed to 1.9 percent
over 2019-23, below already anemic longterm growth, which averaged 2.7 percent
over the previous two decades. This recent poor growth performance is mainly
due to multiple natural and external
shocks, including Cyclone Kenneth in2019, the COVID-19 pandemic, and the2022 global commodity price shock. As aresult, poverty remains high at 38.2 percent in 2023 (using the lower middle-income poverty rate threshold). The Comoros’ growth is driven by private consumption fueled by remittances as they
support “grands marriages.” Low anddeclining productivity, limited investment and fiscal space, and underperforming state-owned enterprises (SOEs) also
weigh on growth. Even though public
debt is assessed as sustainable, the Comoros is at high risk of public debt distress, largely reflecting the issuance of
non-concessional loans.
Due to red tape, the dominance of stateowned enterprises, and limited market
competition and challenges in accessing
finance, private sector development isweak, constraining job creation. Low levels of human and physical capital andmisallocation of resources have hindered growth in the tourism and fisheries sectors, which hold high potential
for job creation. Labor force participation is also constrained by weak labor

FIGURE 1 Comoros / Public debt, fiscal and current accountbalances
Percent of GDP
45

20570000-1

70

560000-260-415-5-602020

2021e 2022f 2023f 2024f

Debt (lhs)
Current account balance (rhs)2025

54000050

53000040

5200003051000050000049000010-7201955000020105

Real GDP per capita (constant LCU)

80

-3

25

The economy expanded by an estimated 3
percent in 2023 as domestic activities weresupported by the resumption of “grandsmarriages” and the associated increase indiaspora community arrivals, primarily
from France. Public servant salary hikes
in January 2023 aimed at preserving purchasing power, a high level of remittances,and higher public investment supported
domestic demand. On the supply side, theconstruction sector benefited from increased public spending, while the primary sector benefited from higher agricultural prices and favorable climate conditions.
As inflationary pressures from imported
food and energy products moderated, inflation declined from 12.4 percent in 2022
to 9.2 percent in 2023. An increase of 50 basis points in the key monetary policy rate

Poverty rate (%)

3530

Recent developments

FIGURE 2 Comoros / Actual and projected poverty rates
and real GDP per capita

Percent of GDP
040

market institutions and persistent formsof wage discrimination against women.
A low employment intensity of growth
and weak economic growth contribute to
the high poverty level, which is a source offragility for the Comoros. Furthermore, recent shocks have highlighted the Comoros’
vulnerabilities and the need to implement
reforms that increase productivity and private investment to promote growth. These
include reforms to improve the businessenvironment and increase financial intermediation. Higher public investment, including in infrastructure, is also needed
to attract larger private investments, including foreign direct investment.

48000002026

4700002014

Fiscal balance (rhs)

Sources: National authorities and World Bank estimates and forecasts.

2016

2018

2020

1

Apr 242024

2026

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

MPO2022

in July 2023 and lower credit growth inresponse to liquidity management operations also helped decrease inflation.
Stronger domestic demand translated intohigh import demand and contributed to
the widening of the current account to 5.8
percent of GDP in 2023 (from 0.5 percent in2022). However, international reserves remained at adequate levels as the Comoros
received exceptional financing from international financial institutions.
The fiscal deficit continued to widen in2023 to an estimated 4.4 percent of GDP,
despite improved domestic revenue mobilization. The deterioration of the fiscal position by 0.4 percentage points of GDP in
2023 was mainly driven by a large increasein public spending of 3.5 percentage pointsof GDP, particularly higher public capital
expenditures. Public debt stock reached38.2 percent of GDP at end-2023, comparedwith 34.0 percent of GDP at end-2022.
Compliance with quantitative fiscal targets
under the four-year International Monetary Fund Extended Credit Facility program approved in June 2023 is expected tohelp improve fiscal outturns and containthe increase in public debt.
The January 2024 presidential election wasfollowed by post-electoral demonstrations,which weighed on economic activities andslowed progress on the implementation of
public projects and policy.

Outlook
The economic recovery from the COVIDrelated slowdown is expected to continue, with growth reaching 3.3 percent in
2024 and 4.2 percent over 2025-26, driven
primarily by private consumption andpublic investment. The construction of
the El Maarouf hospital and the Galawa
hotel, as well as the construction orrestoration of roads and ports, should
support the economic recovery. In themedium term, productivity growth is expected to benefit from the 2023 energy
law, which promotes the production ofelectricity from renewable sources. The
creation of a credit registry and a partial
credit guarantee scheme, as well as theoperationalization of the leasing law in
2024-25, are also expected to support therecovery in 2025-26. The poverty rate isexpected to decrease slowly to 36.2 percent in 2026 as the economy continues toexpand more rapidly.

TABLE 2 Comoros / Macro poverty outlook indicators

Lower imported inflation would contribute to lower headline inflation of
2.2 percent in 2024. Lower global commodity prices and improvements inthe monetary policy framework wouldalso help reduce inflation. The current
account deficit is expected to average
5.5 percent of GDP over 2024-26, asmajor public investments contribute to
the widening of the trade deficit to an
average of 20 percent of GDP. Public debt is projected to reach 38.2 percent of GDP by 2026. Fiscal consolidation, enhanced SOE performance monitoring, and increased expenditure efficiency are expected to reduce the fiscal
deficit to 2.2 percent of GDP by 2026.
The outlook faces significant downside risks related to the impact of the2024 elections on the pace of execution of investment projects and delays in the implementation of key fiscal and governance reforms during
the first half of the year. Concomitantly, contingent liabilities threaten
debt sustainability. Other downside
risks include the cholera outbreakin February 2024, prolonged global
geopolitical tensions, and the occurrenceof natural disasters.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
2.1
1.0
5.0
9.6
48.2
7.7

2022
2.6
0.2
5.4
2.0
22.6
4.2

2023e
3.0
1.9
11.6
8.0
-4.2
3.0

2024f
3.3
3.2
0.7
4.8
5.1
3.7

2025f
4.0
3.6
4.5
6.8
6.5
5.6

2026f
4.3
3.6
5.4
2.9
6.5
3.2

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

2.0
3.4
-0.2
1.8

2.4
3.3
0.4
2.4

3.0
4.7
2.3
2.4

3.3
4.3
1.0
3.2

4.0
4.6
1.5
4.2

4.2
5.0
3.04.1

Inflation (consumer price index)
Current account balance (% of GDP)

0.0
-0.5

12.4
-0.7

9.2
-5.8

2.2
-5.8

2.3
-5.4

2.2
-5.6

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-2.8
17.0
29.8
-2.5

-3.9
14.2
33.7
-3.7

-4.4
17.4
38.2
-4.0

-3.2
17.2
39.9
-2.9

-2.5
15.7
39.1
-2.2

-2.2
15.7
38.7
-1.9

18.2
39.0
68.2

18.1
38.5
67.9

18.1
38.2
67.2

17.9
38.1
66.7

17.4
37.0
65.7

16.8
36.2
64.8

2.1
48.7

2.1
48.8

2.1
49.0

2.2
49.1

2.3
49.3

2.1
49.3

a,b

International poverty rate ($2.15 in 2017 PPP)a,b
Lower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2015-EESIC. Actual data: 2014. Nowcast: 2015-2023. Forecasts are from 2024 to 2026.
b/ Projection using neutral distribution (2014) with pass-through = 0.87 (Med (0.87)) based on GDP per capita in constant LCU.

MPO2

Apr 24