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- GDP (PPP):
- $0.9 billion
- 2.5% growth
- 1.9% 5-year compound annual growth
- $1,258 per capita
- Inflation (CPI):
- FDI Inflow:
Comoros’s economic freedom score is 51.4, making its economy the 142nd freest in the 2013 Index. Its overall score is 3.9 points higher than last year due to noteworthy advancements in investment freedom, financial freedom, trade freedom, and business freedom. Comoros is ranked 32nd out of 46 countries in the Sub-Saharan Africa region, and its overall score is lower than the regional average.
Since its economic freedom was first assessed in the 2009 Index, Comoros has advanced its overall economic freedom score by 8 points, with particularly notable gains in the area of market openness measured through trade freedom, investment freedom, and financial freedom. Comoros has achieved its highest economic freedom score ever in the 2014 Index and has moved out of the ranks of the economically “repressed.”
Despite significant progress, Comoros continues to lag in promoting the effective rule of law. The judicial system remains vulnerable to political interference, and property rights are not strongly protected. Lingering corruption further undermines freedom and hampers the emergence of more vibrant economic activity.
The three-island Union of the Comoros has endured more than 20 coups d’états since independence in 1975. Under a 2001 constitution granting each island increased autonomy, the presidency rotates among the three islands every four years, and the transfer of power to Ikililou Dhoinine in 2010 was peaceful. The International Monetary Fund and World Bank gave Comoros $176 million in debt relief in 2012. Remittances are an important source of income. Fishing, agriculture, and forestry employ approximately 80 percent of the workforce and provide over 40 percent of GDP. Only about 10 percent of the economy is industrialized. Comoros is a leading producer of ylang-ylang, cloves, and vanilla.
Corruption remains a major problem, affecting all levels of the government, judiciary, and civil service, as well as the police and security forces. In 2013, protestors on the island of Mohéli denounced bad governance, misuse of public funds, and unfair procurement practices. The judicial system is ineffective, contracts are weakly enforced, and courts are relatively inexperienced in commercial litigation.
The individual income tax rate is 30 percent, and the corporate tax rate is 50 percent. Other taxes include a value-added tax (VAT) and an insurance tax. The overall tax burden is 12.4 percent of GDP. Government spending is equivalent to 22.1 percent of the domestic economy. Public debt has declined to below 45 percent of GDP as the government completes its debt reduction under the Heavily Indebted Poor Countries Initiative.
Despite some progress, the regulatory environment still imposes significant burdens on entrepreneurs. Minimum capital requirements to launch a company exceed twice the average level of annual income. With development of a modern labor market lagging, the informal sector is the source of most employment. The government subsidizes state-owned utilities (water, electricity, and oil) and controls other prices.
Comoros has an average tariff rate of 6.2 percent. Historically, foreign investors have found the environment challenging, although the government does allow them to repatriate profits freely. The financial system remains underdeveloped, but the banking sector has recorded modest expansion. Non-performing loans have declined steadily in recent years. Privatization of the Development Bank of the Comoros has progressed.