Comoros Economic Update: An Ocean of Opportunities - Blue Economy as a Driver of Sustainable Growth

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The first edition of the Comoros Economic Update, titled An Ocean of Opportunities: Blue Economy as a Driver of Sustainable Growth, presents recent economic trends and the medium-term outlook. The report’s focus section explores how the blue economy can drive growth, create jobs, and protect ecosystems while ensuring long-term resource sustainability.

Report Highlights

The economy is rising but remains insufficient to reduce persistent poverty and inequality
In 2024, Comoros’ economy grew modestly from 3% to 3.4%, driven by household consumption and services, supported by rising remittances and easing inflation. Agriculture and industry also expanded but per capita income stagnated, and poverty levels remained high. Public finances came under pressure. Revenues held steady at 16.6% of GDP, while spending surged due to large externally financed projects, widening the fiscal deficit from 1.3% to 3.9%. Public debt rose to 36.8% of GDP, prompting the IMF and World Bank to classify Comoros at high risk of debt distress. Remittances, averaging 11.3% of GDP over the past decade, remain a vital source of household income but cannot offset trade imbalances or fund development. The banking sector remains fragile, with high non-performing loans and solvency issues limiting credit access and private sector growth. Inclusive reforms to strengthen public finances, diversify the economy, and build resilience for long-term, sustainable growth are needed.

Despite a positive growth outlook, Comoros faces persistent macroeconomic risks and structural development challenges
Between 2025 and 2027, Comoros is projected to maintain steady growth, driven by private consumption and public investment, particularly in infrastructure and preparations for the 2027 Indian Ocean Island Games. Inflation is expected to decline, supported by reforms such as the liberalization of rice imports. However, the country continues to face macroeconomic challenges such as high import dependency, limited export diversification, and persistent inflationary pressures. WTO accession presents could open new markets, but may reduce trade revenues without complementary policies. Climate change, natural disasters, and global volatility further threaten stability. Weak governance, high youth unemployment, and limited formal job creation constrain the country’s capacity to respond effectively to these challenges.

To ensure sustained growth, Comoros needs to reform fiscal policy, boost private sector growth, and strengthen governance to ensure resilience
With public debt projected at 37% of GDP in 2024 and domestic revenues among the lowest globally, fiscal space remains constrained. Key reforms include broadening the tax base, modernizing tax administration, and improving public financial management. Strengthening debt transparency and relying on concessional financing will be critical to mitigate debt distress. Private sector development requires removing regulatory barriers, expanding access to finance, and leveraging remittances. WTO accession offers export diversification opportunities, particularly in fisheries and agriculture, but must be supported by investments in trade logistics and quality infrastructure. Financial sector reforms are also needed to address high non-performing loans and expand financial inclusion. Improving governance, enhancing SOE oversight, and advancing decentralization, alongside stronger anti-corruption and judicial systems, will be essential to improve service delivery and build investor confidence.

Comoros can drive inclusive growth by unlocking its blue economy through reforms, investment, and sustainability
Comoros holds significant untapped potential in its natural capital, particularly in fisheries and marine tourism. The country struggles to translate its high per capita fisheries wealth into economic growth due to weak infrastructure, outdated practices, and limited market access. A well-executed blue economy strategy, anchored in governance reforms, infrastructure investment, and environmental stewardship, could raise GDP growth and support the country’s goal of reaching upper-middle-income status by 2050. This aligns with the objectives of the Plan Emergent Comores 2030, which prioritizes sustainable resource management and climate resilience. Key priorities include modernizing fisheries, expanding aquaculture, improving port and energy infrastructure, and enhancing financial inclusion, especially for women and MSMEs. Strong governance, marine spatial planning, and digital innovation will be essential to manage resources sustainably. By aligning human capital development, climate resilience, and inclusive finance with blue economy goals, Comoros can drive long-term, inclusive, and sustainable growth.