Comoros: Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

The Comorian economy was already weakened by political uncertainty and the passage of cyclone Kenneth when it was hit by the Covid-19 pandemic in 2020. From an estimated growth of 1.9% in 2019, GDP contracted by -0.5% in 2020 due to a drop in exports of cash crops and tourism (IMF). Economic growth rebounded to 1.6% in 2021, and is expected to pick up to 3.8% in 2022 and 3.7% in 2023, against a more favourable global economic backdrop and continuing development partners’ support (IMF).

In 2021, the Comorian economy started to recover from the challenges posed by the Covid-19 pandemic. During the crisis the country did not follow a containment strategy but closed its borders and instituted a curfew (AfDB). Remittances slowed, tourism fell and liquidity pressures increased. The IMF approved USD 12 million in emergency assistance to help the country address the pandemic and the country also benefited from IMF debt service relief under the Catastrophe Containment and Relief Trust. The budget deficit increased from 2.1% GDP in 2019 to 3.6% GDP in 2020, due to lower tax revenues and increased public spending (AfDB). In 2021 public debt continued its upward trend, reaching 26.6% GDP, and it is expected to further increase to 29.9% in 2022 and 32.6% in 2023 (IMF). The risk of debt distress is nonetheless considered moderate (AfDB). The already low inflation rate of 0.8% in 2020 turned into deflation in 2021 (-1%), and it is expected to pick up to 1.2% in 2022 and 1.4% in 2023 (IMF). Despite large imports, inflation is contained because the Comorian franc is pegged against the euro. Supporting economic and social recovery remains a priority and the government has requested IMF assistance. In July 2021, the IMF approved a Staff-Monitored Program (SMP) designed to support the government’s program of reforms and to pave the way to a potential Extended Credit Facility (ECF) arrangement. To tackle economic fragility, the government’s top priority is to raise fiscal revenue to support investment in human and physical capital and enhance debt sustainability. The authorities also aim to strengthen the quality of spending, public financial management, State-Owned Enterprises (SOE) oversight, and the financial sector. To address institutional fragility, the authorities aim to enhance governance (IMF). Some of Comoros biggest challenges include weak institutional capacities, a lack of basic infrastructure, heavy dependence on external aid, high exposure to threats related to the over exploitation of natural resources (deforestation, land degradation, groundwater pollution, and coastal erosion), corruption and an inefficient judicial system that is vulnerable to political interference.

With 45% of the population living below the poverty line, Comoros is one of the poorest countries in the world. The unemployment rate in Comoros has increased to around 9.2% (World Bank, 2020). General under employment is the norm, and a large part of the population works in the primary sector. The country is ranked 156/189 in the Human Development Index. Every year, dozens of Comorians die while trying to sail to the French Department of Mayotte.

Monetary Indicators	2016	2017	2018	2019	2020
Comoro Franc (KMF) - Average Annual Exchange Rate For 1 GHS	111.47	100.35	90.85	84.52	76.97

Source: World Bank - Latest available data.

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Latest Update: February 2023