MORONI, June 21 (Reuters) - Comoros' economy will expand by 3.5 percent in 2013 from 3 percent in 2012, the government said, while inflation is expected to ease to 4 percent on the tiny Indian Ocean archipelago.
Comoros said average yearly inflation was 6.3 percent in 2012 but prices on the group of three volcanic islands sandwiched between Madagascar and southern Africa will decline as world oil and food prices are expected to ease.
'Growth will continue to be driven primarily by the subsistence agriculture and cash crop sectors, provided that rainfall is as abundant as it was in 2012,' the government said in a letter to the International Monetary Fund, dated May 18, but published late on Thursday.
Comoros is the world's largest producer of the essence ylang ylang, as well as an exporter of vanilla and cloves.
Comoros said money saved from the debt relief it is granted by the IMF and the World Bank would go towards a supplementary budget. It will aim at increasing tax revenues, trimming the public wage bill and cutting domestic arrears to 0.9 percent of GDP.
(Reporting By Drazen Jorgic; Editing by Richard Lough and Elizabeth Piper) Keywords: COMOROS ECONOMY/
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