Union of the Comoros: 2025 Article IV Consultation and Fifth Review under the Extended Credit Facility Arrangement, and Request for Waivers of Nonobservance of Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director for the Union of the Comoros

International Monetary Fund

No 2026/047, IMF Staff Country Reports from International Monetary Fund

Abstract: Despite headwinds from energy shortages and declining prices for key export commodities, the recovery gained further momentum in 2025, underpinned by robust domestic demand. After peaking in March, inflation steadily declined on the back of lower import prices and improved supply conditions. Unplanned transfers to stem social pressures from mass firings of airport workers in the context of the authorities’ decision to modernize the airport through a PPP, led to a modest fiscal slippage in June 2025, which widened in September due to continued transfer spending, a leadership vacuum in the revenue agencies, and private sector pushback against new revenue measures. The external position remained stable, with a narrower goods trade deficit, resilient remittances, and an adequate level of international reserves. However, downside risks to the outlook remain significant, reflecting endemic fragility and elevated global uncertainty. Comoros’ narrow export and production bases, and dependency on imports, remittances and aid, render it vulnerable to shocks. The economic reform program supported by the Extended Credit Facility (ECF) is making steady progress in reducing fragility and enhancing resilience by rebuilding fiscal buffers, reducing debt vulnerabilities, strengthening governance.

Pages: 139
Date: 2026-02-19
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