According IMF Mission Chief for Comoros Harry Trines, real economic growth in the country is projected at 3 to 3.5 per cent in 2014. Last year the Union of Comoros recorded a growth of 3.5 per cent.
“While Comoros has made notable progress in recent years and macroeconomic policy making and economic performance have improved since the adoption of the new constitution in 2009, much remains to be done to consolidate and accelerate inclusive economic growth,” said Trines.
He added the country must maintain focus on policies that emphasize macroeconomic stability and improvements in infrastructure, and implement reforms that improve the competitiveness of the economy and strengthen the business environment.
Trines spoke after the conclusion of Article IV consultation in the country.
The mission concluded that Comoros is facing many challenges and the government must strive to find a better balance between the resources available and expenditures.
Inflation in the country stood at 3.5 per cent at the end of last although it had eased to 0.7 per cent by August 2014.
Both exports and imports grew strongly in volume terms in 2013, the former from a very low base but while remittances also continued to increase, the current account deficit is estimated at above 10 per cent in 2014 compared to 9.5 per cent in 2013.
According to Trines, the Union of Comoros must take drastic measures to contain the runaway wage bill, improve the reliability of energy supply, focus on infrastructure investment and social spending.
“Implementation of the 2014 budget has been challenging, particularly after mid-year. Resources have been inadequate to meet the higher wage bill resulting from the increase in teacher salaries approved in March and previously unbudgeted expenditures, including on the administration of the elections,” he noted.
The mission urged the authorities to prioritize spending for the remainder of the year so that arrears on wages and salaries and external loans can be eliminated by year-end.
International Monetary Fund (IMF)