The archipelago of the Comoros is in the Indian Ocean, north of the Mozambique Channel and northeast of Madagascar.
Political Context: Azali Assoumani was re-elected for a third term as President of the Comoros Union in January 2024 following the first round of presidential elections on January 14th, 2024. Elected in 2016, after ten years of absence from the political scene, Azali Assoumani returned and won the last three presidential elections (2016, 2019, 2024). His government introduced a series of structural reforms, including a review and overhaul of the Presidential Rotation System among the islands.
Economic Overview: The economy expanded by an estimated 3% in 2023 as domestic activities were supported by the resumption of “grands marriages” (big weddings) and the associated increase in diaspora 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, the construction 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% in 2022 to 9.2% in 2023.
An increase of 50 basis points in the key monetary policy rate in July 2023 and lower credit growth in response to liquidity management operations also helped decrease inflation. The fiscal deficit continued to widen in 2023 to an estimated 4.4% 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 increase in public spending of 3.5 percentage points of GDP, particularly higher public capital expenditures.
The economic recovery from the COVID-related slowdown is expected to continue, with growth reaching 3.3% in 2024 and 4.2% over 2025-26, driven primarily by private consumption and public investment. The construction of the El Maarouf Hospital and the Galawa Hotel and the construction or restoration of roads and ports should support the economic recovery. In the medium term, productivity growth is expected to benefit from the 2023 energy law, which promotes the production of electricity from renewable sources. The creation of a credit registry and a partial credit guarantee scheme, as well as the operationalization of the leasing law in 2024-25, are also expected to support the recovery in 2025-26. The poverty rate is expected to decrease slowly to 36.2% in 2026 as the economy continues to expand more rapidly. Fiscal consolidation, enhanced SOE performance monitoring, and increased expenditure efficiency are expected to reduce the fiscal deficit to 2.2% of GDP by 2026.
Social Context: Comoros is densely populated, with approximately 465 inhabitants per km2 and 53% of the population under 20 years of age. High population density places intense pressure on natural resources and the environment. The country’s location and topography are among the most climate-vulnerable in the world, and 54.2% of the population lives in at-risk areas.
Some 45% of the population live just below the national poverty line, and 44% face either moderate or severe food insecurity. Comoros children can expect to complete 8.4 years of schooling by 18 years of age. Chronic malnutrition leads to stunting in 31 of 100 children. The social safety net system in Comoros is progressing, but its impact is limited due to inadequate coverage.
Comoros
has created “safety net” programs in recent years to assist very poor
households and to contribute to crisis response: safety net programs have been
enhanced to strengthen resilience and improve human capital and coverage has
been increased. The programs have been in place since 2015 and are now well
established, and the results and impacts are confirmed by evaluations. Last Updated: Apr
01, 2024
https://www.worldbank.org/en/country/comoros/overview
Norb Leahy, Dunwoody GA Tea
Party Leader
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