IMF国际货币组织全球-Union-of-the-Comoros_Request-for-Disbursement-Under-the-Rapid-Credit-Facility-and-Purchase-Under-the-Rapid-Financing-Instrument_41页_793kb

Summary of IMF Country Report No. 20/152: Union of the Comoros

Core Content

The IMF Country Report No. 20/152 outlines the Union of the Comoros' request for financial assistance under the Rapid Credit Facility (RCF) and Rapid Financing Instrument (RFI) to address the economic impact of the COVID-19 pandemic. The report highlights the severe economic and financial challenges faced by the country, including a decline in remittances, a halt in tourist arrivals, and liquidity strains in the banking sector.

Main Points

1. IMF Assistance Approved

• The IMF Executive Board approved SDR 8.9 million (equivalent to US$12 million, or 50% of quota) to support Comoros.
• This includes:
  • SDR 2.97 million under the RCF (16.7% of quota).
  • SDR 5.93 million under the RFI (33.3% of quota).
• The country also benefits from debt service relief under the Catastrophe Containment and Relief Trust (CCRT), which provides US$1.2 million in relief for the next 6 months, potentially extendable for up to 2 years.

2. Economic Impact of the Pandemic

• The pandemic is causing a substantial decline in economic growth.
• Growth is revised down by 5.6 percentage points to -1.2% in 2020, with a rebound to 3.1% in 2021.
• The external financing need is estimated at 5.2% of GDP, and the fiscal financing need at 4.7% of GDP.
• The current account is being negatively affected due to the decline in remittances and tourism-related exports.

3. Key Economic Challenges

• Remittances have slowed due to the economic downturn in France, where most of the diaspora resides.
• Tourism activity has ceased, which is a major source of foreign exchange.
• Banking sector liquidity is under pressure due to increased cash withdrawals and reduced inflows.
• Healthcare spending is expected to rise by 2% of GDP due to the pandemic.

4. Government Measures and Responses

• The government has implemented public health measures, including quarantining travelers and closing schools.
• Customs duties have been temporarily lowered for essential goods.
• Tax filing deadlines have been delayed to ease cash flow constraints.
• The government is seeking donor support, with the World Bank offering US$5 million and France indicating willingness to assist.
• The central bank has lowered reserve requirements to alleviate liquidity pressures.

5. Policy Recommendations

• Fiscal policy should aim to cushion the economic impact and ensure that the fiscal position aligns with medium-term goals.
• Monetary policy should focus on maintaining the exchange rate peg to the euro and ensuring sufficient liquidity in the banking system.
• Financial sector supervision is critical, with the need to monitor asset quality, extend loan maturities to affected borrowers, and ensure the stability of the banking system.
• Contingency planning and risk monitoring are essential to address potential fiscal and external risks.

Key Information

• IMF Support: US$12 million in emergency assistance, including RCF and RFI disbursements, is approved to address the balance of payments and fiscal financing needs.
• Debt Relief: Comoros receives US$1.2 million in debt service relief under the CCRT, which could be extended.
• Economic Outlook: The economic outlook is highly uncertain, with downside risks including a prolonged pandemic impact and natural disasters.
• Fiscal Deficit: The domestic primary deficit is projected to deteriorate by 4.7% of GDP due to lower revenues and increased healthcare spending.
• Reserve Levels: Foreign exchange reserves are expected to remain at 6.2 months of imports in 2020, slightly below the adequate level of 6.8 months.

Tables and Annexes

• Table 1: Provides a detailed breakdown of fiscal projections for 2020 and 2021, showing the impact of the pandemic on revenue and expenditure.
• Annex I: Includes a debt sustainability analysis update, highlighting the sustainability of external debt.
• Annex II: Contains the Letter of Intent, which outlines the request for Fund support and the terms of the assistance.

Conclusion

The Union of the Comoros is facing a severe economic shock due to the COVID-19 pandemic, compounded by the recent impact of Cyclone Kenneth. The IMF has approved emergency financial support to help address the balance of payments and fiscal needs. The government is advised to prioritize healthcare spending, manage liquidity strains, and maintain the exchange rate peg. The IMF remains committed to monitoring the situation and providing further support as needed.