Union of the Comoros: Second Review under the Extended Credit Facility Arrangement and Request for a Waiver of Nonobservance of Performance Criterion-Press Release; Staff Report; and Statement by the Executive Director for the Union of Comoros

Economic conditions have improved since the beginning of the ECF-supported program. Real GDP growth is expected to remain on an upward trajectory peaking at around 4½ percent under the program. Inflation is projected to decline further in 2024 although at a much slower pace than observed in 2023. The near completion of large public projects and the steady improvement in domestic revenue mobilization will be key driving factors for the improvement in the domestic primary balance. The external sector is stable, and gross international reserves are expected to remain above 7 months of import cover over the program period. The baseline, however, is subject to considerable uncertainty as Comoros continues to face the challenges of a small, fragile island state: significant development challenges, balance of payments needs, a high risk of debt distress, vulnerabilities in the banking system, governance and corruption vulnerabilities, and exposure to climate change risks. Tropical storms that impacted East Africa in April and May also inflicted significant damage across the country.