Abstract
Resilient growth is observed in 2012 in Seychelles. Weakness in tourism has been offset by increases from less-traditional markets. The current account and adjustments has administered prices in the second half of 2011, and a cycle of depreciation and inflation ensued. The fiscal accounts suffered in the first half of 2012 from the restructuring arrangement for Air Seychelles. The banking system remains solid and continues to maintain healthy capital adequacy ratios. Despite strong program performance, Seychelles remains highly vulnerable to external shocks.
External debt
Despite a tick up in 2012–14, external debt is on a declining trend aimed at achieving the authorities’ public debt target of 50 percent of GDP by 2018. The increase in external debt from 46 percent of GDP in 2011 to 52 percent in 2014 is mostly due to new borrowing related to infrastructure projects;1 following the restructuring of legacy loans, the authorities are now moving ahead with much-needed improvements in electricity, sewage and water services. Over the medium term, external debt is projected to decline significantly, reaching about 40 percent of GDP by end-2018 (table 1).
External debt dynamics are most sensitive to exchange rate movements, and to a lesser degree, a widening of the large non-interest current account deficit. A real depreciation of 30 percent in 2013 would increase the external debt-to-GDP ratio by almost 30 percentage points to nearly 80 percent (2013). In the event of a one-half standard deviation deterioration in the non-interest current account Seychelles’ external debt would increase steadily to 77 percent of GDP in 2017. In both cases, policy measures would be required in order to meet the 2018 debt target.
Public debt
Seychelles’ public debt remains high but sustainable provided that the authorities maintain fiscal discipline. Restructuring agreements have been reached with all but one bilateral creditor. Under the policies envisaged in the 2013 budget and authorities’ medium-term fiscal projections, the ratio of government debt to GDP is projected to rise to 78 percent in 2012 (excludes t-bills issued for monetary purposes) before declining gradually thereafter. The tick up is mainly due to the recognition of contingent liabilities assumed by the government from Air Seychelles.2 Achieving the public debt target of 50 percent of GDP by 2018 requires maintaining average primary surpluses above 4 percent of GDP through 2018.
Public debt dynamics are sensitive to a variety of shocks. All stress tests lead to a significantly higher stock of public debt. This highlights the importance of maintaining macroeconomic stability and sound fiscal policies which target a debt-reducing primary surplus.
Seychelles: External Debt Sustainability Framework, 2007-2018
(In percent of GDP, unless otherwise indicated)
Derived as [r - g - r (1+g) + ea (1+r)]/(1+g+r+gr) times previous period debt stock, with r = nominal effective interest rate on external debt; r = change in domestic GDP deflator in US dollar terms, g = real GDP growth rate, e = nominal appreciation (increase in dollar value of domestic currency), and a = share of domestic-currency denominated debt in total external debt.
The contribution from price and exchange rate changes is defined as [-r (1+g) + ea (1+r)]/(1+g+r+gr) times previous period debt stock. r increases with an appreciating domestic currency (e > 0) and rising inflation (based on GDP deflator).
For projection, line includes the impact of price and exchange rate changes.
Defined as current account deficit, plus amortization on medium- and long-term debt, plus short-term debt at end of previous period.
The key variables include real GDP growth; nominal interest rate; dollar deflator growth; and both non-interest current account and non-debt inflows in percent of GDP.
Long-run, constant balance that stabilizes the debt ratio assuming that key variables (real GDP growth, nominal interest rate, dollar deflator growth, and non-debt inflows in percent of GDP) remain at their levels
Seychelles: External Debt Sustainability Framework, 2007-2018
(In percent of GDP, unless otherwise indicated)
| Actual | Projections | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | Debt-stabilizing non-interest current account 6/ | ||||
| Baseline: External debt | 68.7 | 82.5 | 89.9 | 49.1 | 46.2 | 50.7 | 52.0 | 52.5 | 50.9 | 48.3 | 44.6 | 40.6 | -14.4 | |||
| Change in external debt | 17.5 | 13.8 | 7.3 | -40.7 | -2.9 | 4.4 | 1.3 | 0.6 | -1.6 | -2.6 | -3.7 | -4.0 | ||||
| Identified external debt-creating flows (4+8+9) | -12.2 | 39.7 | 2.8 | -14.6 | 2.6 | 8.1 | 1.1 | -2.1 | -2.6 | -2.7 | -2.8 | -2.7 | ||||
| Current account deficit, excluding interest payments | 12.3 | 16.4 | 6.1 | 17.9 | 21.4 | 21.1 | 17.6 | 16.9 | 13.8 | 12.3 | 10.8 | 9.2 | ||||
| Deficit in balance of goods and services | 10.6 | 16.4 | 9.9 | 17.6 | 21.2 | 25.7 | 19.4 | 18.2 | 15.0 | 13.8 | 12.3 | 10.9 | ||||
| Exports | 99.3 | 108.3 | 121.8 | 101.9 | 103.2 | 103.8 | 101.2 | 100.0 | 99.0 | 98.0 | 98.1 | 98.7 | ||||
| Imports | 109.9 | 124.8 | 131.7 | 119.5 | 124.4 | 129.4 | 120.6 | 118.3 | 114.0 | 111.8 | 110.4 | 109.6 | ||||
| Net non-debt creating capital inflows (negative) | -26.7 | 14.9 | -18.6 | -22.8 | -16.0 | -15.7 | -16.4 | -18.5 | -16.0 | -14.9 | -13.3 | -11.8 | ||||
| Automatic debt dynamics 1/ | 2.3 | 8.4 | 15.3 | -9.7 | -2.9 | 2.8 | -0.2 | -0.5 | -0.4 | -0.2 | -0.2 | -0.2 | ||||
| Contribution from nominal interest rate | 3.1 | 3.7 | 3.6 | 1.9 | 1.1 | 1.4 | 1.3 | 1.4 | 1.5 | 1.6 | 1.4 | 1.3 | ||||
| Contribution from real GDP growth | -5.1 | 1.4 | 0.1 | -4.4 | -2.3 | -1.3 | -1.4 | -2.0 | -1.9 | -1.8 | -1.7 | -1.5 | ||||
| Contribution from price and exchange rate changes 2/ | 4.2 | 3.3 | 11.5 | -7.2 | -1.7 | 2.7 | … | … | … | … | … | … | ||||
| Residual, incl. change in gross foreign assets (2-3) 3/ | 29.7 | -25.8 | 4.5 | -26.1 | -5.4 | -3.7 | 0.2 | 2.6 | 1.0 | 0.1 | -1.0 | -1.3 | ||||
| External debt-to-exports ratio (in percent) | 69.2 | 76.2 | 73.8 | 48.2 | 44.8 | 48.8 | 51.4 | 52.5 | 51.5 | 49.3 | 45.4 | 41.1 | ||||
| Gross external financing need (in billions of US dollars) 4/ | 0.2 | 0.3 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | ||||
| in percent of GDP | 19.9 | 27.3 | 19.7 | 25.3 | 23.5 | 23.5 | 20.5 | 20.1 | 17.5 | 17.0 | 15.8 | 13.9 | ||||
| Scenario with key variables at their historical averages 5/ | 51.0 | 53.3 | 57.3 | 59.6 | 61.1 | 61.4 | 61.1 | -13.2 | ||||||||
| Key Macroeconomic Assumptions Underlying Baseline | ||||||||||||||||
| Real GDP growth (in percent) | 10.1 | -1.9 | -0.2 | 5.6 | 5.0 | 2.7 | 3.0 | 4.0 | 3.8 | 3.7 | 3.7 | 3.6 | ||||
| GDP deflator in US dollars (change in percent) | -7.6 | -4.6 | -12.2 | 8.7 | 3.7 | -5.6 | 3.0 | 1.6 | 1.9 | 2.1 | 2.0 | 1.5 | ||||
| Nominal external interest rate (in percent) | 6.2 | 5.0 | 3.8 | 2.5 | 2.4 | 2.9 | 2.7 | 2.9 | 3.1 | 3.3 | 3.2 | 3.2 | ||||
| Growth of exports (US dollar terms, in percent) | 19.6 | 2.1 | -1.5 | -3.9 | 10.2 | -2.6 | 3.5 | 4.4 | 4.7 | 4.9 | 5.9 | 5.8 | ||||
| Growth of imports (US dollar terms, in percent) | 11.1 | 6.3 | -7.5 | 4.3 | 13.3 | 0.8 | -1.1 | 3.6 | 2.0 | 3.9 | 4.5 | 4.3 | ||||
| Current account balance, excluding interest payments | -12.3 | -16.4 | -6.1 | -17.9 | -21.4 | -21.1 | -17.6 | -16.9 | -13.8 | -12.3 | -10.8 | -9.2 | ||||
| Net non-debt creating capital inflows | 26.7 | -14.9 | 18.6 | 22.8 | 16.0 | 15.7 | 16.4 | 18.5 | 16.0 | 14.9 | 13.3 | 11.8 | ||||
Derived as [r - g - r (1+g) + ea (1+r)]/(1+g+r+gr) times previous period debt stock, with r = nominal effective interest rate on external debt; r = change in domestic GDP deflator in US dollar terms, g = real GDP growth rate, e = nominal appreciation (increase in dollar value of domestic currency), and a = share of domestic-currency denominated debt in total external debt.
The contribution from price and exchange rate changes is defined as [-r (1+g) + ea (1+r)]/(1+g+r+gr) times previous period debt stock. r increases with an appreciating domestic currency (e > 0) and rising inflation (based on GDP deflator).
For projection, line includes the impact of price and exchange rate changes.
Defined as current account deficit, plus amortization on medium- and long-term debt, plus short-term debt at end of previous period.
The key variables include real GDP growth; nominal interest rate; dollar deflator growth; and both non-interest current account and non-debt inflows in percent of GDP.
Long-run, constant balance that stabilizes the debt ratio assuming that key variables (real GDP growth, nominal interest rate, dollar deflator growth, and non-debt inflows in percent of GDP) remain at their levels
Seychelles: External Debt Sustainability Framework, 2007-2018
(In percent of GDP, unless otherwise indicated)
| Actual | Projections | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | Debt-stabilizing non-interest current account 6/ | ||||
| Baseline: External debt | 68.7 | 82.5 | 89.9 | 49.1 | 46.2 | 50.7 | 52.0 | 52.5 | 50.9 | 48.3 | 44.6 | 40.6 | -14.4 | |||
| Change in external debt | 17.5 | 13.8 | 7.3 | -40.7 | -2.9 | 4.4 | 1.3 | 0.6 | -1.6 | -2.6 | -3.7 | -4.0 | ||||
| Identified external debt-creating flows (4+8+9) | -12.2 | 39.7 | 2.8 | -14.6 | 2.6 | 8.1 | 1.1 | -2.1 | -2.6 | -2.7 | -2.8 | -2.7 | ||||
| Current account deficit, excluding interest payments | 12.3 | 16.4 | 6.1 | 17.9 | 21.4 | 21.1 | 17.6 | 16.9 | 13.8 | 12.3 | 10.8 | 9.2 | ||||
| Deficit in balance of goods and services | 10.6 | 16.4 | 9.9 | 17.6 | 21.2 | 25.7 | 19.4 | 18.2 | 15.0 | 13.8 | 12.3 | 10.9 | ||||
| Exports | 99.3 | 108.3 | 121.8 | 101.9 | 103.2 | 103.8 | 101.2 | 100.0 | 99.0 | 98.0 | 98.1 | 98.7 | ||||
| Imports | 109.9 | 124.8 | 131.7 | 119.5 | 124.4 | 129.4 | 120.6 | 118.3 | 114.0 | 111.8 | 110.4 | 109.6 | ||||
| Net non-debt creating capital inflows (negative) | -26.7 | 14.9 | -18.6 | -22.8 | -16.0 | -15.7 | -16.4 | -18.5 | -16.0 | -14.9 | -13.3 | -11.8 | ||||
| Automatic debt dynamics 1/ | 2.3 | 8.4 | 15.3 | -9.7 | -2.9 | 2.8 | -0.2 | -0.5 | -0.4 | -0.2 | -0.2 | -0.2 | ||||
| Contribution from nominal interest rate | 3.1 | 3.7 | 3.6 | 1.9 | 1.1 | 1.4 | 1.3 | 1.4 | 1.5 | 1.6 | 1.4 | 1.3 | ||||
| Contribution from real GDP growth | -5.1 | 1.4 | 0.1 | -4.4 | -2.3 | -1.3 | -1.4 | -2.0 | -1.9 | -1.8 | -1.7 | -1.5 | ||||
| Contribution from price and exchange rate changes 2/ | 4.2 | 3.3 | 11.5 | -7.2 | -1.7 | 2.7 | … | … | … | … | … | … | ||||
| Residual, incl. change in gross foreign assets (2-3) 3/ | 29.7 | -25.8 | 4.5 | -26.1 | -5.4 | -3.7 | 0.2 | 2.6 | 1.0 | 0.1 | -1.0 | -1.3 | ||||
| External debt-to-exports ratio (in percent) | 69.2 | 76.2 | 73.8 | 48.2 | 44.8 | 48.8 | 51.4 | 52.5 | 51.5 | 49.3 | 45.4 | 41.1 | ||||
| Gross external financing need (in billions of US dollars) 4/ | 0.2 | 0.3 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | ||||
| in percent of GDP | 19.9 | 27.3 | 19.7 | 25.3 | 23.5 | 23.5 | 20.5 | 20.1 | 17.5 | 17.0 | 15.8 | 13.9 | ||||
| Scenario with key variables at their historical averages 5/ | 51.0 | 53.3 | 57.3 | 59.6 | 61.1 | 61.4 | 61.1 | -13.2 | ||||||||
| Key Macroeconomic Assumptions Underlying Baseline | ||||||||||||||||
| Real GDP growth (in percent) | 10.1 | -1.9 | -0.2 | 5.6 | 5.0 | 2.7 | 3.0 | 4.0 | 3.8 | 3.7 | 3.7 | 3.6 | ||||
| GDP deflator in US dollars (change in percent) | -7.6 | -4.6 | -12.2 | 8.7 | 3.7 | -5.6 | 3.0 | 1.6 | 1.9 | 2.1 | 2.0 | 1.5 | ||||
| Nominal external interest rate (in percent) | 6.2 | 5.0 | 3.8 | 2.5 | 2.4 | 2.9 | 2.7 | 2.9 | 3.1 | 3.3 | 3.2 | 3.2 | ||||
| Growth of exports (US dollar terms, in percent) | 19.6 | 2.1 | -1.5 | -3.9 | 10.2 | -2.6 | 3.5 | 4.4 | 4.7 | 4.9 | 5.9 | 5.8 | ||||
| Growth of imports (US dollar terms, in percent) | 11.1 | 6.3 | -7.5 | 4.3 | 13.3 | 0.8 | -1.1 | 3.6 | 2.0 | 3.9 | 4.5 | 4.3 | ||||
| Current account balance, excluding interest payments | -12.3 | -16.4 | -6.1 | -17.9 | -21.4 | -21.1 | -17.6 | -16.9 | -13.8 | -12.3 | -10.8 | -9.2 | ||||
| Net non-debt creating capital inflows | 26.7 | -14.9 | 18.6 | 22.8 | 16.0 | 15.7 | 16.4 | 18.5 | 16.0 | 14.9 | 13.3 | 11.8 | ||||
Derived as [r - g - r (1+g) + ea (1+r)]/(1+g+r+gr) times previous period debt stock, with r = nominal effective interest rate on external debt; r = change in domestic GDP deflator in US dollar terms, g = real GDP growth rate, e = nominal appreciation (increase in dollar value of domestic currency), and a = share of domestic-currency denominated debt in total external debt.
The contribution from price and exchange rate changes is defined as [-r (1+g) + ea (1+r)]/(1+g+r+gr) times previous period debt stock. r increases with an appreciating domestic currency (e > 0) and rising inflation (based on GDP deflator).
For projection, line includes the impact of price and exchange rate changes.
Defined as current account deficit, plus amortization on medium- and long-term debt, plus short-term debt at end of previous period.
The key variables include real GDP growth; nominal interest rate; dollar deflator growth; and both non-interest current account and non-debt inflows in percent of GDP.
Long-run, constant balance that stabilizes the debt ratio assuming that key variables (real GDP growth, nominal interest rate, dollar deflator growth, and non-debt inflows in percent of GDP) remain at their levels
Seychelles: External Debt Sustainability: Bound Tests 1/2/
Citation: IMF Staff Country Reports 2013, 024; 10.5089/9781475567601.002.A002
Sources: International Monetary Fund, Country desk data, and staff estimates.1/ Shaded areas represent actual data. Individual shocks are permanent one-half standard deviation shocks. Figures in the boxes represent average projections for the respective variables in the baseline and scenario being presented. Ten-year historical average for the variable is also shown.2/ For historical scenarios, the historical averages are calculated over the ten-year period, and the information is used to project debt dynamics five years ahead.3/ Permanent 1/4 standard deviation shocks applied to real interest rate, growth rate, and current account balance.4/ One-time real depreciation of 30 percent occurs in 2013.Seychelles: External Debt Sustainability: Bound Tests 1/2/
Citation: IMF Staff Country Reports 2013, 024; 10.5089/9781475567601.002.A002
Sources: International Monetary Fund, Country desk data, and staff estimates.1/ Shaded areas represent actual data. Individual shocks are permanent one-half standard deviation shocks. Figures in the boxes represent average projections for the respective variables in the baseline and scenario being presented. Ten-year historical average for the variable is also shown.2/ For historical scenarios, the historical averages are calculated over the ten-year period, and the information is used to project debt dynamics five years ahead.3/ Permanent 1/4 standard deviation shocks applied to real interest rate, growth rate, and current account balance.4/ One-time real depreciation of 30 percent occurs in 2013.Seychelles: External Debt Sustainability: Bound Tests 1/2/
Citation: IMF Staff Country Reports 2013, 024; 10.5089/9781475567601.002.A002
Sources: International Monetary Fund, Country desk data, and staff estimates.1/ Shaded areas represent actual data. Individual shocks are permanent one-half standard deviation shocks. Figures in the boxes represent average projections for the respective variables in the baseline and scenario being presented. Ten-year historical average for the variable is also shown.2/ For historical scenarios, the historical averages are calculated over the ten-year period, and the information is used to project debt dynamics five years ahead.3/ Permanent 1/4 standard deviation shocks applied to real interest rate, growth rate, and current account balance.4/ One-time real depreciation of 30 percent occurs in 2013.Seychelles: Public Sector Debt Sustainability Framework, 2007-2018
(In percent of GDP, unless otherwise indicated)
Includes debt of central government and government-guaranteed debt of parastatals. Excludes domestic debt issued for monetary purposes.
Derived as [(r - p (1+g) - g + ae (1+r)]/(1+g+p+gp)) times previous period debt ratio, with r = interest rate; p = growth rate of GDP deflator; g = real GDP growth rate; a = share of foreign-currency denominated debt; and e = nominal exchange rate depreciation (measured by increase in local currency value of U.S. dollar).
The real interest rate contribution is derived from the denominator in footnote 2/ as r - π (1+g) and the real growth contribution as -g.
The exchange rate contribution is derived from the numerator in footnote 2/ as ae (1+r). For 2012, actual data through end-July 2012.
For projections, this line includes exchange rate changes.
Defined as public sector deficit, plus amortization of medium and long-term public sector debt, plus short-term debt at end of previous period.
The key variables include real GDP growth; real interest rate; and primary balance in percent of GDP. While the debt dynamics under the historical average appear better than under the baseline, this result is driven by a negative historical interest rate.
Derived as nominal interest expenditure divided by previous period debt stock.
Assumes that key variables (real GDP growth, real interest rate, and other identified debt-creating flows) remain at the level of the last projection year.
Seychelles: Public Sector Debt Sustainability Framework, 2007-2018
(In percent of GDP, unless otherwise indicated)
| Actual | Projections | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | Debt-stabilizing primary balance 9/ | ||||
| Baseline: Public sector debt 1/ | 130.7 | 130.0 | 123.5 | 81.6 | 74.3 | 78.1 | 73.6 | 68.7 | 63.6 | 58.9 | 53.7 | 48.2 | -1.2 | |||
| o/w foreign-currency denominated | 68.7 | 82.5 | 89.9 | 49.1 | 46.2 | 50.7 | 52.0 | 52.5 | 50.9 | 48.3 | 44.6 | 40.6 | ||||
| Change in public sector debt | -1.8 | -0.7 | -6.5 | -41.9 | -7.3 | 3.8 | -4.5 | -4.9 | -5.0 | -4.7 | -5.2 | -5.5 | ||||
| Identified debt-creating flows (4+7+12) | -2.5 | 28.9 | -56.3 | 1.2 | -5.9 | -0.9 | -7.0 | -7.2 | -6.9 | -6.4 | -6.5 | -6.0 | ||||
| Primary deficit | 1.1 | -3.6 | -14.2 | -8.6 | -5.4 | -5.9 | -5.6 | -4.5 | -4.4 | -4.4 | -4.6 | -4.4 | ||||
| Revenue and grants | 32.0 | 34.9 | 37.0 | 35.0 | 38.2 | 42.7 | 41.1 | 38.3 | 37.8 | 37.3 | 37.3 | 37.2 | ||||
| Primary (noninterest) expenditure | 33.1 | 31.2 | 22.7 | 26.4 | 32.8 | 36.8 | 35.5 | 33.8 | 33.5 | 33.0 | 32.7 | 32.7 | ||||
| Automatic debt dynamics 2/ | -1.6 | 34.9 | -40.0 | 11.1 | 0.3 | 3.7 | -0.8 | -2.5 | -2.3 | -2.0 | -1.9 | -1.6 | ||||
| Contribution from interest rate/growth differential 3/ | -18.6 | -24.9 | -17.8 | 3.8 | -5.6 | -1.3 | -0.8 | -2.5 | -2.3 | -2.0 | -1.9 | -1.6 | ||||
| Of which contribution from real interest rate | -7.8 | -26.7 | -18.0 | 10.7 | -2.0 | 0.5 | 1.4 | 0.3 | 0.2 | 0.2 | 0.1 | 0.2 | ||||
| Of which contribution from real GDP growth | -10.8 | 1.9 | 0.2 | -6.8 | -3.7 | -1.8 | -2.2 | -2.7 | -2.5 | -2.2 | -2.0 | -1.8 | ||||
| Contribution from exchange rate depreciation 4/ | 17.0 | 59.8 | -22.2 | 7.3 | 5.9 | 5.0 | … | … | … | … | … | … | ||||
| Other identified debt-creating flows | -1.9 | -2.4 | -2.0 | -1.3 | -0.8 | 1.3 | -0.5 | -0.2 | -0.2 | 0.0 | 0.0 | 0.0 | ||||
| Privatization receipts (negative) | -1.9 | -2.4 | -2.0 | -1.3 | -0.8 | -0.8 | -0.5 | -0.2 | -0.2 | 0.0 | 0.0 | 0.0 | ||||
| Recognition of implicit or contingent liabilities | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 2.1 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Other (specify, e.g. bank recapitalization) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Residual, including asset changes (2-3) 5/ | 0.7 | -29.6 | 49.8 | -43.1 | -1.4 | 4.7 | 2.4 | 2.3 | 1.9 | 1.6 | 1.3 | 0.5 | ||||
| Public sector debt-to-revenue ratio 1/ | 409.0 | 372.8 | 334.2 | 233.3 | 194.4 | 182.7 | 178.8 | 179.4 | 168.2 | 157.8 | 143.9 | 129.7 | ||||
| Gross financing need 6/ | 29.5 | 23.9 | 21.0 | 28.1 | 17.6 | 17.4 | 19.4 | 19.8 | 15.5 | 13.3 | 11.6 | 9.8 | ||||
| in billions of U.S. dollars | 0.3 | 0.2 | 0.2 | 0.3 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.1 | ||||
| Scenario with key variables at their historical averages 7/ | 78.1 | 69.5 | 61.6 | 54.0 | 47.0 | 40.3 | 33.3 | -3.1 | ||||||||
| Scenario with no policy change (constant primary balance) in 2012-2017 | 78.1 | 73.4 | 67.1 | 60.6 | 54.4 | 47.9 | 41.0 | -1.1 | ||||||||
| Key Macroeconomic and Fiscal Assumptions Underlying Baseline | ||||||||||||||||
| Real GDP growth (in percent) | 10.1 | -1.9 | -0.2 | 5.6 | 5.0 | 2.7 | 3.0 | 4.0 | 3.8 | 3.7 | 3.7 | 3.6 | ||||
| Average nominal interest rate on public debt (in percent) 8/ | 6.1 | 6.9 | 8.8 | 5.0 | 4.0 | 6.0 | 5.2 | 4.1 | 3.6 | 3.7 | 3.5 | 3.5 | ||||
| Average real interest rate (nominal rate minus change in GDP deflator, in percent) | -6.0 | -27.6 | -17.5 | 8.6 | -2.4 | 0.9 | 1.9 | 0.5 | 0.4 | 0.5 | 0.3 | 0.5 | ||||
| Nominal appreciation (increase in US dollar value of local currency, in percent) | -27.5 | -51.7 | 47.3 | -7.4 | -11.5 | … | … | … | … | … | … | … | ||||
| Inflation rate (GDP deflator, in percent) | 12.1 | 34.6 | 26.3 | -3.6 | 6.4 | 5.1 | 3.2 | 3.6 | 3.3 | 3.3 | 3.3 | 3.0 | ||||
| Growth of real primary spending (deflated by GDP deflator, in percent) | -12.7 | -7.4 | -27.3 | 22.7 | 30.5 | 15.2 | -0.7 | -0.9 | 2.8 | 2.1 | 2.9 | 3.6 | ||||
| Primary deficit | 1.1 | -3.6 | -14.2 | -8.6 | -5.4 | -5.9 | -5.6 | -4.5 | -4.4 | -4.4 | -4.6 | -4.4 | ||||
Includes debt of central government and government-guaranteed debt of parastatals. Excludes domestic debt issued for monetary purposes.
Derived as [(r - p (1+g) - g + ae (1+r)]/(1+g+p+gp)) times previous period debt ratio, with r = interest rate; p = growth rate of GDP deflator; g = real GDP growth rate; a = share of foreign-currency denominated debt; and e = nominal exchange rate depreciation (measured by increase in local currency value of U.S. dollar).
The real interest rate contribution is derived from the denominator in footnote 2/ as r - π (1+g) and the real growth contribution as -g.
The exchange rate contribution is derived from the numerator in footnote 2/ as ae (1+r). For 2012, actual data through end-July 2012.
For projections, this line includes exchange rate changes.
Defined as public sector deficit, plus amortization of medium and long-term public sector debt, plus short-term debt at end of previous period.
The key variables include real GDP growth; real interest rate; and primary balance in percent of GDP. While the debt dynamics under the historical average appear better than under the baseline, this result is driven by a negative historical interest rate.
Derived as nominal interest expenditure divided by previous period debt stock.
Assumes that key variables (real GDP growth, real interest rate, and other identified debt-creating flows) remain at the level of the last projection year.
Seychelles: Public Sector Debt Sustainability Framework, 2007-2018
(In percent of GDP, unless otherwise indicated)
| Actual | Projections | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | Debt-stabilizing primary balance 9/ | ||||
| Baseline: Public sector debt 1/ | 130.7 | 130.0 | 123.5 | 81.6 | 74.3 | 78.1 | 73.6 | 68.7 | 63.6 | 58.9 | 53.7 | 48.2 | -1.2 | |||
| o/w foreign-currency denominated | 68.7 | 82.5 | 89.9 | 49.1 | 46.2 | 50.7 | 52.0 | 52.5 | 50.9 | 48.3 | 44.6 | 40.6 | ||||
| Change in public sector debt | -1.8 | -0.7 | -6.5 | -41.9 | -7.3 | 3.8 | -4.5 | -4.9 | -5.0 | -4.7 | -5.2 | -5.5 | ||||
| Identified debt-creating flows (4+7+12) | -2.5 | 28.9 | -56.3 | 1.2 | -5.9 | -0.9 | -7.0 | -7.2 | -6.9 | -6.4 | -6.5 | -6.0 | ||||
| Primary deficit | 1.1 | -3.6 | -14.2 | -8.6 | -5.4 | -5.9 | -5.6 | -4.5 | -4.4 | -4.4 | -4.6 | -4.4 | ||||
| Revenue and grants | 32.0 | 34.9 | 37.0 | 35.0 | 38.2 | 42.7 | 41.1 | 38.3 | 37.8 | 37.3 | 37.3 | 37.2 | ||||
| Primary (noninterest) expenditure | 33.1 | 31.2 | 22.7 | 26.4 | 32.8 | 36.8 | 35.5 | 33.8 | 33.5 | 33.0 | 32.7 | 32.7 | ||||
| Automatic debt dynamics 2/ | -1.6 | 34.9 | -40.0 | 11.1 | 0.3 | 3.7 | -0.8 | -2.5 | -2.3 | -2.0 | -1.9 | -1.6 | ||||
| Contribution from interest rate/growth differential 3/ | -18.6 | -24.9 | -17.8 | 3.8 | -5.6 | -1.3 | -0.8 | -2.5 | -2.3 | -2.0 | -1.9 | -1.6 | ||||
| Of which contribution from real interest rate | -7.8 | -26.7 | -18.0 | 10.7 | -2.0 | 0.5 | 1.4 | 0.3 | 0.2 | 0.2 | 0.1 | 0.2 | ||||
| Of which contribution from real GDP growth | -10.8 | 1.9 | 0.2 | -6.8 | -3.7 | -1.8 | -2.2 | -2.7 | -2.5 | -2.2 | -2.0 | -1.8 | ||||
| Contribution from exchange rate depreciation 4/ | 17.0 | 59.8 | -22.2 | 7.3 | 5.9 | 5.0 | … | … | … | … | … | … | ||||
| Other identified debt-creating flows | -1.9 | -2.4 | -2.0 | -1.3 | -0.8 | 1.3 | -0.5 | -0.2 | -0.2 | 0.0 | 0.0 | 0.0 | ||||
| Privatization receipts (negative) | -1.9 | -2.4 | -2.0 | -1.3 | -0.8 | -0.8 | -0.5 | -0.2 | -0.2 | 0.0 | 0.0 | 0.0 | ||||
| Recognition of implicit or contingent liabilities | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 2.1 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Other (specify, e.g. bank recapitalization) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Residual, including asset changes (2-3) 5/ | 0.7 | -29.6 | 49.8 | -43.1 | -1.4 | 4.7 | 2.4 | 2.3 | 1.9 | 1.6 | 1.3 | 0.5 | ||||
| Public sector debt-to-revenue ratio 1/ | 409.0 | 372.8 | 334.2 | 233.3 | 194.4 | 182.7 | 178.8 | 179.4 | 168.2 | 157.8 | 143.9 | 129.7 | ||||
| Gross financing need 6/ | 29.5 | 23.9 | 21.0 | 28.1 | 17.6 | 17.4 | 19.4 | 19.8 | 15.5 | 13.3 | 11.6 | 9.8 | ||||
| in billions of U.S. dollars | 0.3 | 0.2 | 0.2 | 0.3 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.1 | ||||
| Scenario with key variables at their historical averages 7/ | 78.1 | 69.5 | 61.6 | 54.0 | 47.0 | 40.3 | 33.3 | -3.1 | ||||||||
| Scenario with no policy change (constant primary balance) in 2012-2017 | 78.1 | 73.4 | 67.1 | 60.6 | 54.4 | 47.9 | 41.0 | -1.1 | ||||||||
| Key Macroeconomic and Fiscal Assumptions Underlying Baseline | ||||||||||||||||
| Real GDP growth (in percent) | 10.1 | -1.9 | -0.2 | 5.6 | 5.0 | 2.7 | 3.0 | 4.0 | 3.8 | 3.7 | 3.7 | 3.6 | ||||
| Average nominal interest rate on public debt (in percent) 8/ | 6.1 | 6.9 | 8.8 | 5.0 | 4.0 | 6.0 | 5.2 | 4.1 | 3.6 | 3.7 | 3.5 | 3.5 | ||||
| Average real interest rate (nominal rate minus change in GDP deflator, in percent) | -6.0 | -27.6 | -17.5 | 8.6 | -2.4 | 0.9 | 1.9 | 0.5 | 0.4 | 0.5 | 0.3 | 0.5 | ||||
| Nominal appreciation (increase in US dollar value of local currency, in percent) | -27.5 | -51.7 | 47.3 | -7.4 | -11.5 | … | … | … | … | … | … | … | ||||
| Inflation rate (GDP deflator, in percent) | 12.1 | 34.6 | 26.3 | -3.6 | 6.4 | 5.1 | 3.2 | 3.6 | 3.3 | 3.3 | 3.3 | 3.0 | ||||
| Growth of real primary spending (deflated by GDP deflator, in percent) | -12.7 | -7.4 | -27.3 | 22.7 | 30.5 | 15.2 | -0.7 | -0.9 | 2.8 | 2.1 | 2.9 | 3.6 | ||||
| Primary deficit | 1.1 | -3.6 | -14.2 | -8.6 | -5.4 | -5.9 | -5.6 | -4.5 | -4.4 | -4.4 | -4.6 | -4.4 | ||||
Includes debt of central government and government-guaranteed debt of parastatals. Excludes domestic debt issued for monetary purposes.
Derived as [(r - p (1+g) - g + ae (1+r)]/(1+g+p+gp)) times previous period debt ratio, with r = interest rate; p = growth rate of GDP deflator; g = real GDP growth rate; a = share of foreign-currency denominated debt; and e = nominal exchange rate depreciation (measured by increase in local currency value of U.S. dollar).
The real interest rate contribution is derived from the denominator in footnote 2/ as r - π (1+g) and the real growth contribution as -g.
The exchange rate contribution is derived from the numerator in footnote 2/ as ae (1+r). For 2012, actual data through end-July 2012.
For projections, this line includes exchange rate changes.
Defined as public sector deficit, plus amortization of medium and long-term public sector debt, plus short-term debt at end of previous period.
The key variables include real GDP growth; real interest rate; and primary balance in percent of GDP. While the debt dynamics under the historical average appear better than under the baseline, this result is driven by a negative historical interest rate.
Derived as nominal interest expenditure divided by previous period debt stock.
Assumes that key variables (real GDP growth, real interest rate, and other identified debt-creating flows) remain at the level of the last projection year.
Seychelles: Public Debt Sustainability: Bound Tests 1/2/
(Public debt in percent of GDP)
Citation: IMF Staff Country Reports 2013, 024; 10.5089/9781475567601.002.A002
Sources: International Monetary Fund, country desk data, and staff estimates.1/ Shaded areas represent actual data. Individual shocks are permanent one-half standard deviation shocks. Figures in the boxes represent average projections for the respective variables in the baseline and scenario being presented. Ten-year historical average for the variable is also shown.2/ For historical scenarios, the historical averages are calculated over the ten-year period, and the information is used to project debt dynamics five years ahead.3/ Permanent 1/4 standard deviation shocks applied to real interest rate, growth rate, and primary balance.4/ One-time real depreciation of 30 percent and 10 percent of GDP shock to contingent liabilities occur in 2013, with real depreciation defined as nominal depreciation (measured by percentage fall in dollar value of local currency) minus domestic inflation (based on GDP deflator).Seychelles: Public Debt Sustainability: Bound Tests 1/2/
(Public debt in percent of GDP)
Citation: IMF Staff Country Reports 2013, 024; 10.5089/9781475567601.002.A002
Sources: International Monetary Fund, country desk data, and staff estimates.1/ Shaded areas represent actual data. Individual shocks are permanent one-half standard deviation shocks. Figures in the boxes represent average projections for the respective variables in the baseline and scenario being presented. Ten-year historical average for the variable is also shown.2/ For historical scenarios, the historical averages are calculated over the ten-year period, and the information is used to project debt dynamics five years ahead.3/ Permanent 1/4 standard deviation shocks applied to real interest rate, growth rate, and primary balance.4/ One-time real depreciation of 30 percent and 10 percent of GDP shock to contingent liabilities occur in 2013, with real depreciation defined as nominal depreciation (measured by percentage fall in dollar value of local currency) minus domestic inflation (based on GDP deflator).Seychelles: Public Debt Sustainability: Bound Tests 1/2/
(Public debt in percent of GDP)
Citation: IMF Staff Country Reports 2013, 024; 10.5089/9781475567601.002.A002
Sources: International Monetary Fund, country desk data, and staff estimates.1/ Shaded areas represent actual data. Individual shocks are permanent one-half standard deviation shocks. Figures in the boxes represent average projections for the respective variables in the baseline and scenario being presented. Ten-year historical average for the variable is also shown.2/ For historical scenarios, the historical averages are calculated over the ten-year period, and the information is used to project debt dynamics five years ahead.3/ Permanent 1/4 standard deviation shocks applied to real interest rate, growth rate, and primary balance.4/ One-time real depreciation of 30 percent and 10 percent of GDP shock to contingent liabilities occur in 2013, with real depreciation defined as nominal depreciation (measured by percentage fall in dollar value of local currency) minus domestic inflation (based on GDP deflator).
