Country Report Comoros June 2011

Outlook for 2011-12: External sector

The current-account deficit is expected to remain wide in 2011-12. Goods exports, which consist predominantly of ylang-ylang, vanilla and cloves, will continue to be dwarfed by goods imports. Export growth will be constrained by weak prices and low agricultural yields. Imports will rise sharply in 2011 and grow modestly in 2012, in line with commodity prices. Services exports will grow only modestly-there is potential for tourism to grow rapidly but a record of enduring political stability would need to be established first. Services imports will rise in line with goods imports, keeping the services account in deficit. Income debits will fall as interim debt relief reduces interest payments. Current transfers, which consist of remittances and foreign aid, will remain substantial (equivalent to about 35% of GDP), offsetting the hefty trade deficit. Overall, the current-account deficit is forecast to widen to 9.9% of GDP in 2011 and narrow to 9.6% of GDP in 2012. This deficit will be financed in part by FDI from the Middle East and credit from the IMF.

© 2011 The Economist lntelligence Unit Ltd. All rights reserved
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