MORONI (Reuters) - The economy of the Indian Ocean island of Comoros could grow by up to 2.5 percent this year if the government implements financial and fiscal reforms, the International Monetary Fund said on Monday.
The IMF estimated that the Comoros, a group of four islands between Madagascar and southern Africa, saw economic growth of more than 2 percent in 2011. It relies chiefly on agriculture and fishing. It is the world’s largest producer of the essence ylang ylang and also exports vanilla and cloves.
In October, its central bank governor said he was targeting growth of more than 3 percent aided by an expansion in the fledgling banking sector and investments in tourism.
The IMF said it had urged the authorities to be vigilant on controlling wages, to limit spending and to intensify steps to enlist private sector involvement in Comores Telecom.
“Timely implementation of the reform agenda would help move real GDP growth up to 2.5 percent in 2012, with inflation below 5 percent, the external current account deficit at 10-1/2 percent of GDP and the domestic primary budget deficit at just over 1 percent of GDP,” the IMF said in a statement.
Comoros has had a turbulent history with some 20 coups or coup attempts since declaring independence from France in 1975.
“Against a backdrop of easing political tensions, stronger program ownership, and increasing donor interest, Comoros’ economic prospects are favorable notwithstanding a difficult global context,” the IMF said.
“Provided that the reform efforts are intensified, real GDP growth could durably exceed the rate of population expansion in the medium-term.”