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Comoros - Joint World Bank-IMF Debt Sustainability Analysis (English)

This streamlined updated DSA incorporates the COVID-19 impact. Compared to the DSA prepared for the 2019 Article Four consultation, the economic outlook is assumed to be weaker. For 2020, economic growth projections are revised down by 5.6 percentage points to -1.2 percent, and growth of exports of goods and services is revised by 10.1 percentage points to -9.7 percent, followed by a quick recovery in 2021. These and related changes result in additional external and fiscal financing needs of 5.2 percent of GDP and 4.7 percent of GDP in 2020-21, respectively. These needs are expected to be filled in part by additional grants (1.7 percent of GDP), and additional external borrowing (2.6 percent of GDP). Long run projections for economic and export growth remain broadly unchanged from before. Comoros’ debt carrying capacity continues to be assessed as medium, and total contingent liabilities are maintained at 10.9 percent of GDP. The realism tools do not flag issues. The updated DSA finds that the risk of external debt distress remains ‘medium’, with limited space to absorb shocks. As in the previous DSA, all debt and debt service indicators remain below their respective thresholds but exhibit an upward trend over the long run. (The PV of PPG external debt-to-exports ratio increases by 1 percentage point in 2029 to 161.2 percent compared to the previous DSA). Also, buffers to high risk territory are now forecast to erode more quickly as a result of weaker export and growth performance and additional take-up of debt in the near term. Stress tests and alternative scenarios continue to demonstrate Comoros’ vulnerability to natural disasters, shocks to exports, and depreciation. Public-sector domestic debt remains small, with no breaches of the public debt benchmark under the baseline or adverse scenarios.

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Comoros - Joint World Bank-IMF Debt Sustainability Analysis (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/718751595278640147/Comoros-Joint-World-Bank-IMF-Debt-Sustainability-Analysis