Seychelles’s fiscal stance for 2012 allows maintaining a steady course toward debt reduction. The authorities’ decisions to downsize the loss-making national airline and raise tariffs of public enterprises are crucial steps for easing fiscal pressures and ensuring sufficient capital expenditure, in particular in much-needed infrastructure projects. Price subsidies through the Stabilization Fund will be replaced with targeted transfers to low-income households. The structural reform agenda for 2012 builds on progress made to date, focusing on taxation, public finance management, public enterprises, and the financial sector.
This paper presents Seychelles’ 2008 Article IV Consultation and Request for a Stand-By Arrangement. Large macroeconomic imbalances and vulnerabilities resulting from longstanding unsustainable macroeconomic policies, combined with recent external shocks, culminated in mid-2008 with the near-exhaustion of foreign reserves and missed payments on public debt obligations. Growth is declining, and inflation has risen sharply. The pegged exchange rate that was incompatible with fundamentals, together with a complex system of exchange restrictions and controls, has resulted in economic dislocation, a parallel exchange market, and pervasive dollarization.
This paper discusses key findings of the Third Review Under the Stand-By Arrangement for Seychelles. The program is on track, and macroeconomic stabilization has advanced rapidly. The authorities continue to implement the program with a high degree of ownership and success. All quantitative performance criteria (PC) and structural benchmarks at end-September 2009 were met. The structural reform effort is progressing well. Key progress has been made on public financial management, notably through the treasury single account. The 2010 budget features a much improved and complete presentation of government finance.
This paper discusses Seychelles’ Request for a Three-Year Policy Coordination Instrument (PCI) and Ex Post Assessment of Longer-Term Program Engagement. The PCI for Seychelles will build on the lessons from the previous programs supported by the IMF. It aims to support the authorities’ efforts to consolidate macroeconomic stabilization and foster sustained and inclusive growth. While the PCI involves no use of IMF resources, successful completion of program reviews would help signal Seychelles’ commitment to continued strong economic policies and structural reforms. Risks to the program are considered moderate given Seychelles’ impressive track record under the successive IMF arrangements. The IMF staff support the authorities’ request for a PCI.
This paper discusses key findings of the First Review for Seychelles under the Stand-By Arrangement. Developments under the program at end-December 2008 were broadly satisfactory. Although growth was lower and inflation higher than targeted in 2008, the liberalization of the exchange regime and interest rate have removed the severe distortions weighing on the economy, and early signs of stabilization are apparent. The program targets for 2009 have been adjusted, primarily in light of the much more difficult external environment.
This paper is an account of Seychelles’ monetary efforts to establish its position in 2012. After the recovery in 2008, the country had solid growth through 2011. The important threat was external risks, which could lower tourist inflows, and piracy. Alternatively, the authorities were vigilant, and organized the state by strengthening state enterprises, introducing new reforms to eradicate obstacles to the private sector, and the increasing bills for monetary purposes. The Executive Board acknowledges that these policies enhanced a positive outlook for the country.
Economic developments since the completion of the first review under the Policy Coordination Instrument (PCI) in June 2018 have been broadly in line with expectations. The program is largely on track. Staff received renewed assurance from President Faure that the large infrastructure projects announced in his State of the Nation Address (SONA) in March 2018 would be implemented within the fiscal targets under the PCI.
This paper discusses Seychelles’ First Review Under the Policy Coordination Instrument (PCI) and Request for Modification of Targets. All quantitative targets for end-December 2017, the program’s first review test date, were met. Although there are no structural reform targets due for the first review, the structural agenda for 2018 is proceeding in line with the program. Given the authorities’ strong program implementation and continued commitment to safeguarding macroeconomic stability, the IMF staff supports the authorities’ request for the completion of the first review under the PCI and the modification of the end-June 2018 and end-December 2018 quantitative targets for reserve money.
This 2017 Article IV Consultation highlights Seychelles’ continued strong macroeconomic performance in 2016. Economic growth reached 4.5 percent, reflecting increased tourist arrivals, stronger output in the fishing industry, and expanding credit to the private sector. Helped by low commodity prices and a stable exchange rate, inflation (year over year) was negative throughout early 2017. The external current account deficit remained largely unchanged, while gross international reserves at the end of 2016 reached four months of prospective imports of goods and services. With continued foreign investment and rising arrivals in the tourism sector, the growth outlook for 2017 remains positive.
This paper discusses Seychelles’ Fourth Review Under the Policy Coordination Instrument (PCI) and Request for Modification of Targets. Economic developments since the completion of the 2019 Article IV consultation and the third review under the PCI in June 2019 have been broadly in line with expectations. The program is largely on track. The 2020 budget recently submitted to the National Assembly is in line with the program and the major infrastructure and climate change related projects would be implemented within the fiscal parameters under the PCI. All quantitative targets for end-June 2019, the program’s fourth review test date, were met except for the primary fiscal surplus target, which was missed by a very small margin due to a delay in receipts from 2016 to 2017 sales of a telecom company. The economic outlook continues to be favorable. Downside risks to the outlook largely stem from possible external shocks, including weakness in the key tourism markets and global banks’ withdrawal of correspondent banking relationships.