An International Monetary Fund (IMF) team, led by Ms. Suchanan Tambunlertchai, has reached a staff-level agreement with the Comorian authorities on the third review of the Extended Credit Facility (ECF)-supported program. The discussions took place in Moroni and Washington D.C., focusing on economic policies and reforms. Approval by the IMF's Management and Executive Board is pending.
Ms. Tambunlertchai stated, "Performance under the ECF-supported program has been broadly on track amid a political transition and a more challenging financing environment." Three out of five targets for June 2024 were met, although tax revenue fell short due to health-related and weather disruptions. The issue of external arrears remains due to liquidity challenges, highlighting gaps in Public Financial Management (PFM). Efforts are underway to clear these arrears before an Executive Board meeting scheduled for December 2024.
The economy shows signs of slowing down, with reduced imports and credit availability in the private sector. Inflation rose to 8.1% in August, driven by increased prices for imported food items like rice and meats. Despite this, fiscal consolidation exceeded expectations due to lower investment spending. The trade deficit improved compared to last year, with stable external reserves by end-June.
Discussions emphasized maintaining structural reform momentum, particularly in domestic revenue mobilization and deeper PFM reforms. Strengthening Comoros' anti-corruption framework and implementing new governance laws for state-owned enterprises were also key topics.
Comoros faces challenges typical of a small island state; adherence to the ECF-supported program is seen as crucial for maintaining macroeconomic stability and advancing structural reforms while attracting additional financial support.
The IMF team met with several government officials including Secretary General Nour El Fath Azali, Minister of Finance Ibrahim Mohamed Abdourazak, Central Bank Governor Younoussa Imani, General Commissioner Najda Said Abdallah, as well as commercial banks and other stakeholders.
Ms. Tambunlertchai expressed gratitude for "the excellent cooperation" from all parties involved during their discussions.
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