Union of the Comoros : 2023 Article IV Consultation, First Review Under the Extended Credit Facility Arrangement, Requests for Waivers of Nonobservance of Performance Criteria, and Modifications of Performance Criteria-Press Release; Staff Report; Debt Sustainability Analysis; and Statement by the Executive Director for the Union of the Comoros

This paper highlights Union of the Comoros' 2023 Article IV Consultation, First Review under the Extended Credit Facility (ECF) Arrangement, Requests for Waivers of Nonobservance of Performance Criteria, and Modifications of Performance Criteria. Performance under Comoros's economic reform program has been broadly satisfactory, despite a challenging context and the authorities remain committed to the ECF Arrangement. Policy priorities under the program aim to preserve medium-term fiscal and debt sustainability, improve public financial management by monitoring fiscal risks from state-owned enterprises, enhance financial sector stability through strengthening supervision and resolution capacities, and improve the governance architecture. Continued fiscal consolidation, including through improved domestic revenue mobilization, will gradually reduce financing needs and create the fiscal space necessary for the considerable social and investment spending priorities. The focus on strengthening the monetary policy toolkit is welcome and the fixed exchange rate regime has provided an effective anchor for monetary policy and ensured sufficient external buffers for Comoros. Sound program implementation would help to ensure economic resilience and support social and developmental objectives