Press Release No. 11/311

Press Release: Statement at the End of an IMF Staff Visit to the Union of the Comoros

August 23, 2011

A mission of the International Monetary Fund (IMF) led by Mr. Mbuyamu Matungulu, Mission Chief for the Union of the Comoros, visited Moroni during August 16–23, 2011 to discuss progress in implementing Comoros’ economic reforms supported by the IMF under the Extended Credit Facility (ECF).

At the end of the mission, Mr. Matungulu made the following statement today in Moroni:

“Real gross domestic product (GDP) growth is projected at slightly over 2 percent for 2011, underpinned by an uptick in rain-fed agricultural production and increased foreign direct investment (FDI). The favorable harvest is helping contain domestic price pressures. Consumer price inflation—which increased sharply in July due to demand pressures from visiting members of the Diaspora—will still likely not exceed 5 percent by the end of 2011. Developments in the external sector are marked by brisk imports partly due to the pick-up in FDI and a higher oil bill, widening the external current account deficit. Nevertheless, foreign reserves should remain at a comfortable equivalent of six months of imports. In the fiscal area, a supplementary budget approved by Parliament in June has reset the civil service wage bill at a level more compatible with the government’s revenue mobilization capacity. The short-term fiscal prospects appear to be improving as a result, with the domestic primary fiscal deficit likely to be contained around the targeted 1.3 percent of GDP under the program for 2011.

“The authorities have expressed their commitment to address delays in the structural reform agenda, in particular with respect to restructuring of public utilities, which is essential to reinforcing the production base of the economy and to improving the provision of basic services to the population. The government intends to seek immediate donor support to that effect.

“The mission will return in early October and looks forward to a consolidation of progress in budgetary stabilization and decisive advances in the structural reform program.

“The mission wishes to thank the authorities for their hospitality.”