Context

1. Seychelles has made considerable progress toward economic stability under successive Fund arrangements, and it was recently designated as a high-income economy. Since the 2008 balance of payments and debt crisis, the authorities enacted an extensive set of reforms that quickly restored fiscal and monetary credibility, with external support and Paris Club debt restructuring, and reduced the role of the state in the economy. Underpinned by the authorities’ prudent macroeconomic policies, the country enjoyed strong economic growth while running significant primary fiscal surpluses since 2009. As a result, the public-debt-to-GDP ratio was reduced by almost two thirds by end-2015, and prospective import coverage improved significantly to over 4 months from less than 1 month at end-2008. With economic and social indicators among the highest in small states,¹ Seychelles was recently designated a high-income economy by the World Bank: it is the only high-income country in Sub-Saharan Africa.

Growth and Fiscal Balance

(2008–2016)

Citation: IMF Staff Country Reports 2017, 160; 10.5089/9781484304785.002.A001

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Growth and Fiscal Balance

(2008–2016)

Citation: IMF Staff Country Reports 2017, 160; 10.5089/9781484304785.002.A001

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Growth and Fiscal Balance

(2008–2016)

Citation: IMF Staff Country Reports 2017, 160; 10.5089/9781484304785.002.A001

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Gross International Reserves and Public Debt

(2008–2016)

Citation: IMF Staff Country Reports 2017, 160; 10.5089/9781484304785.002.A001

Sources: Seychelles authorities; and IMF staff estimates.

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Gross International Reserves and Public Debt

(2008–2016)

Citation: IMF Staff Country Reports 2017, 160; 10.5089/9781484304785.002.A001

Sources: Seychelles authorities; and IMF staff estimates.

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Gross International Reserves and Public Debt

(2008–2016)

Citation: IMF Staff Country Reports 2017, 160; 10.5089/9781484304785.002.A001

Sources: Seychelles authorities; and IMF staff estimates.

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Selected Indicators in Small States

(2016 or latest available)

Sources: WED, World Economic Outlook; World Bank, World Development Indicators.

Selected Indicators in Small States

(2016 or latest available)

	Bahamas	Barbados	Fiji	Maldives	Mauritius	Singapore	Sechelles
GDP per capita (USD)	24,272	15,955	5,182	9,554	9,424	51,849	14,938
Real GDP growth (percent average 2012-16)	0.2	0.6	3.5	4.0	3.4	3.1	5.0
Public debt (percentage of JDP;	67	105	50	80	63	107	68
External current account balance (% of GDP; average 2012-16)	−17.0	−8.2	−4.6	−8.8	−5.7	18.9	−18.5
Adult literacy rate (percent)	96	100	94	99	91	97	95
Life expectancy at birth, total (years)	75	75	70	77	74	83	73
Infant mortality rate (per 1,000 live births)	10	12	19	7	12	2	12

Sources: WED, World Economic Outlook; World Bank, World Development Indicators.

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Selected Indicators in Small States

(2016 or latest available)

	Bahamas	Barbados	Fiji	Maldives	Mauritius	Singapore	Sechelles
GDP per capita (USD)	24,272	15,955	5,182	9,554	9,424	51,849	14,938
Real GDP growth (percent average 2012-16)	0.2	0.6	3.5	4.0	3.4	3.1	5.0
Public debt (percentage of JDP;	67	105	50	80	63	107	68
External current account balance (% of GDP; average 2012-16)	−17.0	−8.2	−4.6	−8.8	−5.7	18.9	−18.5
Adult literacy rate (percent)	96	100	94	99	91	97	95
Life expectancy at birth, total (years)	75	75	70	77	74	83	73
Infant mortality rate (per 1,000 live births)	10	12	19	7	12	2	12

Sources: WED, World Economic Outlook; World Bank, World Development Indicators.

2. Despite this impressive macroeconomic performance, social concerns came to surface in 2016 and temporary fiscal slippage led to a delay in completing the fourth review under the Extended Arrangement (EFF). The Household Budget Survey (HBS) published in December 2015 implied that 39 percent of the population were living below the authorities’ poverty line. Although other broader measures of poverty widely used for international comparison indicate that Seychelles performs significantly better,² the 2015 HBS led to increasing social concerns about poverty and inequality. Following his narrow victory in the Presidential Elections in December 2015, then-President Michel responded to the social concerns with a series of fiscal commitments, entailing permanent costs of 3 percent of GDP on an annual basis, in his 2016 State of the Nation address (SONA).³ This effectively put the EFF-supported program off track and led to a delay in completing the fourth review. After the authorities submitted the 2017 budget to the National Assembly in line with the agreement with the staff, the fourth and fifth reviews under the EFF were concluded by the Board in mid-January 2017. This sixth review is the final review under the current EFF. The authorities’ policies for the next five years would be anchored by their medium-term debt reduction goal—bringing the public debt to GDP ratio below 50 percent by 2020. Raising potential growth and reducing inequality while building resilience to climate change are also key challenges going forward. The authorities recently expressed their interests in a possible successor arrangement after the EFF expires in early June; this will be discussed further later in the year.

3. The government and the legislature are controlled by different parties. In September 2016, the opposition alliance won a majority in the National Assembly for the first time in 40 years. While the President’s party continues in government, it is weakened by its loss of control of the legislature. President Michel stepped down in mid-October 2016 handing over executive power to the then-Vice President Faure.

4. The authorities’ policies have been largely aligned with the advice from the previous Article IV consultation, albeit with a slight loosening of fiscal stance (Box 1). Following the fiscal commitments announced in the 2016 SONA, the authorities revised down the primary surplus target to 3 percent of GDP from 2016 onwards, compared with 3¾ percent of GDP envisaged at the time of the 2015 Article IV consultation. Staff estimates that this revised primary surplus would lead to a steady reduction of public-debt-to-GDP ratio to below 50 percent by 2020, two years later than the authorities’ original medium-term debt reduction goal. This revised goal, in the view of the staff and the authorities, strikes an adequate balance between attaining social objectives and preserving economic stability. The monetary policy stance has been appropriate to achieve inflation targets and curb private sector credit growth. The flexible exchange rate has allowed for a build-up of foreign reserves, and the Central Bank of Seychelles (CBS) has made progress toward a more forward-looking monetary policy framework. Structural reforms have also been implemented to improve public financial management (PFM) and strengthen the state-owned enterprises (SOEs), resulting in new PFM and SOE action plans (see ¶23). Significant progress has been made in strengthening macroprudential surveillance and advancing transparency of the offshore financial sector. However, considering global trends toward withdrawal of correspondent banking relations (CBRs), the authorities would need to step up efforts to strengthen the financial regulatory framework (including for anti-money laundering and counter financing terrorism (AML/CFT) and the offshore sector), and to build confidence with the effective enforcement of the laws (see ¶32).

Box 1.

Seychelles: Main Recommendations of the 2015 Article IV Consultation

Source: IMF Staff

Recommendations	Status
Fiscal Policy and Public Financial Management
1. Target primary surplus of 3¾ percent of GDP from 2016 onwards to buttress the medium- term debt reduction target of bringing public- debt-to-GDP ratio below 50 percent by 2018.	1. The authorities revised down the primary surplus target to 3 percent of GDP in 2016 in an effort to address social concerns on poverty. The medium-term target of bringing public debt-to-GDP ratio below 50 percent has been postponed by two years to 2020.
2. Improve execution and efficiency of planned investment spending.	2. While the authorities made significant progress, including articulating public investment manual (PIM). However, the recent public expenditure financial accountability (PEFA) assessment identifies remaining weakness in public investment management. The PFM Action Plan recently submitted to Cabinet specifies measures to address weakness identified by the PEFA.
3. Continue the progress to strengthen the SEO sector	3. The financial performance of the SOE has improved over the past two years. The SOE Action Plan recently submitted to Cabinet specifies measures to address weakness identified by TA from AFRITAC and the World Bank.
Monetary and foreign exchange policy
4. Maintain appropriately tight monetary policy stance.	4. The CBS has kept appropriately tight monetary policy stance, which contributed to contain inflation at a very low level.
5. Continue the progress toward a stronger monetary policy framework in which interest rate plays a prominent role.	5. The CBS made significant progress with the help of Fund TA. It intends to reintroduce an interest rate corridor around an appropriate policy rate starting in the third quarter of 2017.
6. Maintain the flexible exchange rate policy.	6. The CBS has maintained flexible exchange rate policy while kept the international reserves buffer at an adequate level.
Financial sector policy and structural reform
7. Continue efforts to upgrade macroprudential policies and strengthen regulations on offshore sector.	7. Seychelles has made significant progress toward enhanced macroprudential policies and more transparent offshore financial sector. However, considering global trends toward withdrawal of correspondent banking relations, efforts on the offshore sector would need to be stepped up.
8. Improve the business environment, including reducing cross-subsidization in electricity prices.	8. Progress has been limited in improving business environment. Adjustment in electricity tariffs to reduce cross subsidization has not been implemented.

Source: IMF Staff

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Recommendations	Status
Fiscal Policy and Public Financial Management
1. Target primary surplus of 3¾ percent of GDP from 2016 onwards to buttress the medium- term debt reduction target of bringing public- debt-to-GDP ratio below 50 percent by 2018.	1. The authorities revised down the primary surplus target to 3 percent of GDP in 2016 in an effort to address social concerns on poverty. The medium-term target of bringing public debt-to-GDP ratio below 50 percent has been postponed by two years to 2020.
2. Improve execution and efficiency of planned investment spending.	2. While the authorities made significant progress, including articulating public investment manual (PIM). However, the recent public expenditure financial accountability (PEFA) assessment identifies remaining weakness in public investment management. The PFM Action Plan recently submitted to Cabinet specifies measures to address weakness identified by the PEFA.
3. Continue the progress to strengthen the SEO sector	3. The financial performance of the SOE has improved over the past two years. The SOE Action Plan recently submitted to Cabinet specifies measures to address weakness identified by TA from AFRITAC and the World Bank.
Monetary and foreign exchange policy
4. Maintain appropriately tight monetary policy stance.	4. The CBS has kept appropriately tight monetary policy stance, which contributed to contain inflation at a very low level.
5. Continue the progress toward a stronger monetary policy framework in which interest rate plays a prominent role.	5. The CBS made significant progress with the help of Fund TA. It intends to reintroduce an interest rate corridor around an appropriate policy rate starting in the third quarter of 2017.
6. Maintain the flexible exchange rate policy.	6. The CBS has maintained flexible exchange rate policy while kept the international reserves buffer at an adequate level.
Financial sector policy and structural reform
7. Continue efforts to upgrade macroprudential policies and strengthen regulations on offshore sector.	7. Seychelles has made significant progress toward enhanced macroprudential policies and more transparent offshore financial sector. However, considering global trends toward withdrawal of correspondent banking relations, efforts on the offshore sector would need to be stepped up.
8. Improve the business environment, including reducing cross-subsidization in electricity prices.	8. Progress has been limited in improving business environment. Adjustment in electricity tariffs to reduce cross subsidization has not been implemented.

Source: IMF Staff

5. Seychelles is the first pilot country for Climate Policy Change Assessment (CCPA) for small states. In this context, this Article IV mission discussed macro-critical aspects of CCPA, following on the joint FAD and World Bank TA mission held in early March.

Recent Developments, Outlook and Risks

6. Economic conditions have been favorable recently (^{Tables 1}–⁵). Tourist arrivals grew by 9¾ percent in 2016 with strong growth from the major European markets and the UAE, though nominal receipts did not grow as fast because the euro, in which most of the receipts are denominated, depreciated against the US dollar during the period. This, coupled with strong investment, resulted in real GDP growth estimated at around 4½ percent in 2016. The nominal exchange rate has been stable in recent months while gross international reserves (GIR) have been in line with the staff’s projection at the time of the 4^th and 5^th reviews. Supported by tight monetary policy, as well as by low international fuel prices, year-on-year CPI inflation has been negative for the past 14 months.⁴ Private sector credit growth has been moderate while financial soundness indicators suggest that banks are adequately capitalized and liquid.

Table 1.

Seychelles: Balance of Payments, 2014–22

Sources: Central Bank of Seychelles; Ministry of Finance; and IMF staff estimates and projections.

¹From 2015 onwards the data reflect the findings of the IIP survey, which indicated that the proportion of equity to debt in FDI flows was being significantly overestimated

²Includes parastatals for which data are available.

³Per STA recommendations, renewals of off-shore licenses are excluded.

⁴Excludes foreign-currency denominated required reserves held by banks and project and blocked accounts at the CBS.

Table 1.

Seychelles: Balance of Payments, 2014–22

								2014	2015	2016	2017	2018	2019	2020	2021	2022
								Est.	Est.	Proj.	Proj.	Proj.	Proj.	Proj.	Proj.	Proj.
Current account balance (+ surplus; – deficit)								−310	−256	−263	−240	−246	−275	−302	−333	−341
		(percent of GDP)						−23.1	−18.6	−18.4	−16.4	−15.9	−16.8	−17.4	−18.3	−17.8
	Balance of goods and services (+ surplus; – deficit)							−211	−124	−143	−131	−156	−177	−207	−249	−261
			Exports of goods					539	449	459	517	536	557	590	626	663
				Of which: oil re-exports				193	147	131	178	186	192	203	217	233
				Of which: tuna exports				318	239	270	279	287	298	317	336	353
			Imports of goods					1,081	922	973	1,034	1,087	1,136	1,193	1,281	1,343
				Of which: oil imports				282	170	162	242	276	279	295	315	316
							FDI-related	91	80	60	48	41	52	55	93	92
							grants- and loans-related	84	63	95	96	89	86	94	84	90
							other	624	609	657	649	682	719	750	790	844
			Exports of services					834	848	879	909	927	948	969	996	1,028
					Of which: tourism earnings1			398	393	414	428	436	446	457	470	485
			Imports of services					504	498	508	523	532	545	572	590	610
	Balance on primary income (+ surplus; – deficit)							−102	−105	−112	−81	−67	−72	−70	−61	−54
		Of which: interest due						42	27	41	35	34	37	39	41	39
						transfers of profits and dividends		16	18	19	18	16	17	18	19	19
	Balance on secondary income (+ surplus; – deficit)							3	−27	−8	−28	−23	−26	−26	−24	−25
			Of which: general government, net					57	38	49	29	27	27	27	27	27
Capital account								39	37	57	56	44	36	24	23	24
Financial account								258	279	153	151	208	266	308	323	337
	Direct investment, net 1							216	148	91	78	73	85	89	140	139
		Abroad						−71	−5	10	10	10	10	10	10	10
		In Seychelles						145	144	101	88	83	95	99	151	150
			Of which: offshore sector					0	0	0	0	0	0	0	0	0
		Portfolio investment, net						−13	36	−50	−42	−12	18	58	69	62
		Other investment, net						55	94	111	115	146	164	160	115	137
			Government and government-guaranteed					22	−14	−25	10	18	12	26	9	11
				Disbursements				21	0	5	37	44	41	63	52	59
					Project loans			3	0	5	27	34	41	63	52	59
					Program loans			27	10	10	10	10	0	0	0	0
				Amortization				−16	−24	−44	−36	−35	−38	−46	−52	−56
			Private sector 2					32	108	136	105	128	152	134	106	125
Net errors and omissions								50	12	39	0	0	0	0	0	0
Overall balance								36	72	−53	−33	5	27	29	13	20
Financing								−36	−72	14	33	−5	−27	−29	−13	−19
	Change in net international reserves (increase: –)							−36	−72	14	33	−5	−27	−29	−13	−20
			Change in gross official reserves (increase: –)					−38	−74	14	31	1	−20	−22	−7	−15
			Liabilities to IMF, net					1	2	−1	2	−6	−7	−7	−6	−5
	Other net foreign assets (increase: –)							0	0	0	0	0	0	0	0	1
	Exceptional financing							0	0	0	0	0	0	0	0	0
	Financing gap							0	0	39	0	0	0	0	0	−1
Memorandum items:
	Exports G&S growth, percent							9.2	−5.5	3.1	6.6	2.6	2.8	3.6	4.1	4.3
	Tourism growth, percent							−7.6	−1.2	5.3	3.5	1.9	2.3	2.3	3.0	3.2
	Exports of goods volume growth, percent							−4.8	−12.1	8.7	2.8	2.9	3.5	4.6	4.7	4.3
	Imports G&S growth, percent							17.5	−10.3	4.2	5.1	4.0	3.8	5.0	6.0	4.4
	Imports of goods volume growth, percent							8.6	2.0	13.1	−2.4	4.4	4.2	4.4	6.4	3.9
	Exports G&S, percent of GDP							102	94	94	97	95	92	90	89	88
	Imports G&S, percent of GDP							118	103	104	106	105	103	102	102	102
	FDI, percent of GDP 3							−16.1	−10.8	−6.4	−5.3	−4.7	−5.2	−5.2	−7.7	−7.2
Gross official reserves (stock, e.o.p.)								463	537	523	492	491	512	534	541	556
	Of which: program definition 4							433	507	492	462	461	481	504	511	526
	(Months of imports of goods & services)							3.9	4.3	4.0	3.6	3.5	3.5	3.4	3.3	3.3
	Percentage of IMF reserve adequacy metric							142	182	181	166	163	168	172	171	173
Government and government-guaranteed external debt								501	475	442	446	449	445	456	450	447
	(Percent of GDP)							37.3	34.5	31.0	30.4	29.0	27.2	26.3	24.6	23.4
GDP								1,343	1,377	1,429	1,467	1,547	1,637	1,735	1,826	1,915

Sources: Central Bank of Seychelles; Ministry of Finance; and IMF staff estimates and projections.

¹From 2015 onwards the data reflect the findings of the IIP survey, which indicated that the proportion of equity to debt in FDI flows was being significantly overestimated

²Includes parastatals for which data are available.

³Per STA recommendations, renewals of off-shore licenses are excluded.

⁴Excludes foreign-currency denominated required reserves held by banks and project and blocked accounts at the CBS.

View Table

Table 1.

Seychelles: Balance of Payments, 2014–22

								2014	2015	2016	2017	2018	2019	2020	2021	2022
								Est.	Est.	Proj.	Proj.	Proj.	Proj.	Proj.	Proj.	Proj.
Current account balance (+ surplus; – deficit)								−310	−256	−263	−240	−246	−275	−302	−333	−341
		(percent of GDP)						−23.1	−18.6	−18.4	−16.4	−15.9	−16.8	−17.4	−18.3	−17.8
	Balance of goods and services (+ surplus; – deficit)							−211	−124	−143	−131	−156	−177	−207	−249	−261
			Exports of goods					539	449	459	517	536	557	590	626	663
				Of which: oil re-exports				193	147	131	178	186	192	203	217	233
				Of which: tuna exports				318	239	270	279	287	298	317	336	353
			Imports of goods					1,081	922	973	1,034	1,087	1,136	1,193	1,281	1,343
				Of which: oil imports				282	170	162	242	276	279	295	315	316
							FDI-related	91	80	60	48	41	52	55	93	92
							grants- and loans-related	84	63	95	96	89	86	94	84	90
							other	624	609	657	649	682	719	750	790	844
			Exports of services					834	848	879	909	927	948	969	996	1,028
					Of which: tourism earnings1			398	393	414	428	436	446	457	470	485
			Imports of services					504	498	508	523	532	545	572	590	610
	Balance on primary income (+ surplus; – deficit)							−102	−105	−112	−81	−67	−72	−70	−61	−54
		Of which: interest due						42	27	41	35	34	37	39	41	39
						transfers of profits and dividends		16	18	19	18	16	17	18	19	19
	Balance on secondary income (+ surplus; – deficit)							3	−27	−8	−28	−23	−26	−26	−24	−25
			Of which: general government, net					57	38	49	29	27	27	27	27	27
Capital account								39	37	57	56	44	36	24	23	24
Financial account								258	279	153	151	208	266	308	323	337
	Direct investment, net 1							216	148	91	78	73	85	89	140	139
		Abroad						−71	−5	10	10	10	10	10	10	10
		In Seychelles						145	144	101	88	83	95	99	151	150
			Of which: offshore sector					0	0	0	0	0	0	0	0	0
		Portfolio investment, net						−13	36	−50	−42	−12	18	58	69	62
		Other investment, net						55	94	111	115	146	164	160	115	137
			Government and government-guaranteed					22	−14	−25	10	18	12	26	9	11
				Disbursements				21	0	5	37	44	41	63	52	59
					Project loans			3	0	5	27	34	41	63	52	59
					Program loans			27	10	10	10	10	0	0	0	0
				Amortization				−16	−24	−44	−36	−35	−38	−46	−52	−56
			Private sector 2					32	108	136	105	128	152	134	106	125
Net errors and omissions								50	12	39	0	0	0	0	0	0
Overall balance								36	72	−53	−33	5	27	29	13	20
Financing								−36	−72	14	33	−5	−27	−29	−13	−19
	Change in net international reserves (increase: –)							−36	−72	14	33	−5	−27	−29	−13	−20
			Change in gross official reserves (increase: –)					−38	−74	14	31	1	−20	−22	−7	−15
			Liabilities to IMF, net					1	2	−1	2	−6	−7	−7	−6	−5
	Other net foreign assets (increase: –)							0	0	0	0	0	0	0	0	1
	Exceptional financing							0	0	0	0	0	0	0	0	0
	Financing gap							0	0	39	0	0	0	0	0	−1
Memorandum items:
	Exports G&S growth, percent							9.2	−5.5	3.1	6.6	2.6	2.8	3.6	4.1	4.3
	Tourism growth, percent							−7.6	−1.2	5.3	3.5	1.9	2.3	2.3	3.0	3.2
	Exports of goods volume growth, percent							−4.8	−12.1	8.7	2.8	2.9	3.5	4.6	4.7	4.3
	Imports G&S growth, percent							17.5	−10.3	4.2	5.1	4.0	3.8	5.0	6.0	4.4
	Imports of goods volume growth, percent							8.6	2.0	13.1	−2.4	4.4	4.2	4.4	6.4	3.9
	Exports G&S, percent of GDP							102	94	94	97	95	92	90	89	88
	Imports G&S, percent of GDP							118	103	104	106	105	103	102	102	102
	FDI, percent of GDP 3							−16.1	−10.8	−6.4	−5.3	−4.7	−5.2	−5.2	−7.7	−7.2
Gross official reserves (stock, e.o.p.)								463	537	523	492	491	512	534	541	556
	Of which: program definition 4							433	507	492	462	461	481	504	511	526
	(Months of imports of goods & services)							3.9	4.3	4.0	3.6	3.5	3.5	3.4	3.3	3.3
	Percentage of IMF reserve adequacy metric							142	182	181	166	163	168	172	171	173
Government and government-guaranteed external debt								501	475	442	446	449	445	456	450	447
	(Percent of GDP)							37.3	34.5	31.0	30.4	29.0	27.2	26.3	24.6	23.4
GDP								1,343	1,377	1,429	1,467	1,547	1,637	1,735	1,826	1,915

Sources: Central Bank of Seychelles; Ministry of Finance; and IMF staff estimates and projections.

¹From 2015 onwards the data reflect the findings of the IIP survey, which indicated that the proportion of equity to debt in FDI flows was being significantly overestimated

²Includes parastatals for which data are available.

³Per STA recommendations, renewals of off-shore licenses are excluded.

⁴Excludes foreign-currency denominated required reserves held by banks and project and blocked accounts at the CBS.

Table 2.

Seychelles: Consolidated Government Operations, 2014–22 ¹

Sources: Seychelles authorities; and IMF staff estimates and projections.

¹Includes the central government and the social security system.

²VAT replaced GST in January 2013.

³CSR and MTT were subsumed into Business Tax in CR 14/186.

⁴From 2015 onwards, wage and salaries and goods and services (to be) spent by government agencies other than Ministries are reclassified into these items from transfers.

⁵Only interest payments on foreign debt are on a commitment basis. Other expenditures are recorded when checks are issued or transfers initiated.

Table 2.

Seychelles: Consolidated Government Operations, 2014–22 ¹

						2014	2015	2016	2017	2018	2019	2020	2021	2022
						Act.	Act.	Prel.	Proj.	Proj.	Proj.	Proj.	Proj.	Proj.
						(Millions of Seychelles rupees)
Total revenue and grants						6,413	6,276	7,205	8,175	8,315	8,679	9,055	9,661	10,271
	Total revenue					5,870	6,132	6,965	7,527	7,846	8,327	8,859	9,482	10,078
			Tax			5,294	5,557	6,188	6,574	6,835	7,255	7,719	8,269	8,790
				Personal income tax		878	948	939	898	806	874	940	1,006	1,071
				Trade tax		376	326	359	335	354	371	391	458	480
				Excise tax		858	962	1,144	1,258	1,475	1,558	1,653	1,768	1,881
				Goods and services tax (GST) / VAT 2		1,803	1,803	1,996	2,125	2,272	2,409	2,562	2,725	2,899
				Business tax 3		782	757	1,039	1,019	1,210	1,283	1,364	1,451	1,544
				Corporate Social Responsibility Tax (CSR) 3		84	79	87	91	97	103	109	116	124
				Marketing Tourism Tax (MTT) 3		40	45	45	61	65	69	73	78	83
				Other		472	637	581	788	556	589	626	666	709
			Nontax			576	575	777	952	1,011	1,072	1,140	1,213	1,288
				Fees and charges		347	322	403	469	498	528	561	597	633
				Dividends from parastatals		151	228	330	429	456	483	514	547	582
				Other		78	25	44	55	58	61	65	69	73
	External grants					543	144	240	648	468	351	196	179	194
Expenditure and net lending						5,981	6,057	7,277	8,394	8,500	8,780	9,071	9,539	10,032
		Current expenditure				4,798	5,130	6,295	6,712	6,966	7,208	7,459	7,713	8,010
			Primary current expenditure			4,393	4,566	5,581	5,891	6,135	6,427	6,723	7,070	7,436
				Wages and salaries 4		1,229	1,753	2,002	2,223	2,284	2,344	2,414	2,486	2,560
				Goods and services 4		1,288	2,126	2,489	2,561	2,719	2,883	3,035	3,228	3,434
				Transfers 4		1,855	659	1,063	1,072	1,096	1,161	1,233	1,312	1,396
					Social program of central government	343	79	130	132	141	148	157	167	177
					Transfers to public sector from central government	1,070	123	80	60	63	67	71	75	80
					Benefits and programs of Social Security Fund	442	458	853	880	892	946	1,006	1,070	1,138
				Other		21	29	27	35	37	39	41	44	46
			Interest due			404	564	714	821	831	781	736	643	574
				Foreign interest		175	181	190	212	204	250	265	288	265
				Domestic interest		229	383	524	609	627	531	471	356	309
		Capital expenditure				1,011	801	909	1,447	1,339	1,334	1,369	1,439	1,611
				Domestically financed		656	651	644	667	708	751	893	1,030	1,083
				Foreign financed		355	150	265	780	631	584	476	409	528
		Net lending				120	77	35	210	160	200	203	345	366
		Contingency				53	49	38	25	35	37	39	42	45
	Primary balance					836	783	642	603	645	680	720	766	813
	Overall balance, commitment basis 5					431	219	−72	−219	−186	−101	−16	122	239
	Change in float					−70	−48	−201	0	0	0	0	0	0
	Overall balance, cash basis (after grants)					361	171	−273	−219	−186	−101	−16	122	239
	Financing					−361	−171	273	219	186	101	16	−122	−239
		Foreign financing				8	−84	−304	19	130	43	240	−2	49
			Disbursements			230	102	287	512	605	563	873	724	831
				Project loans		4	6	25	375	468	563	873	724	831
				Program/budget support		226	96	262	137	137	0	0	0	0
			Scheduled amortization			−222	−186	−591	−493	−475	−520	−633	−727	−796
				Of which Paris Club buy-back		…	…	−269	…	…
		Domestic financing, net				−412	130	578	99	−147	58	−224	−120	−288
			Bank financing			−873	−172	389	89	−132	52	−202	−108	−259
				CBS		−1,076	−488	−191	0	450	650	600	200	200
				Commercial banks		203	316	579	89	−582	−598	−802	−308	−459
			Nonbank financing			461	302	190	10	−15	6	−22	−12	−29
		Privatization and long-term lease of fixed assets				77	46	76	101	202	0	0	0	0
		Transfer of SSF deposits to SPF				…	−176	…	…	…
	Statistical discrepancy					−34	−86	−77	0	0	0	0	0	0
	Memorandum item:
		Pension Fund contribution				180	196	251	210	220	231	242	255	268
		Pension Fund benefits payment				77	85	91	160	174	189	206	224	244
		Pension Fund operating expenses				21	36	37	31	33	34	36	37	39
		External debt service due				397	367	781	705	679	770	898	1,014	1,062
						(Percent of GDP)
Total revenue and grants						37.5	34.2	37.9	40.8	39.1	38.5	37.8	37.9	37.9
	Total revenue					34.3	33.4	36.6	37.6	36.9	36.9	37.0	37.2	37.2
			Tax			30.9	30.3	32.5	32.8	32.1	32.2	32.2	32.4	32.4
				Personal income tax		5.1	5.2	4.9	4.5	3.8	3.9	3.9	3.9	3.9
				Trade tax		2.2	1.8	1.9	1.7	1.7	1.6	1.6	1.8	1.8
				Excise tax		5.0	5.2	6.0	6.3	6.9	6.9	6.9	6.9	6.9
				Goods and services tax (GST) / VAT 2		10.5	9.8	10.5	10.6	10.7	10.7	10.7	10.7	10.7
				Business tax		4.6	4.1	5.5	5.1	5.7	5.7	5.7	5.7	5.7
				Corporate Social Responsibility Tax (CSR)		0.5	0.4	0.5	0.5	0.5	0.5	0.5	0.5	0.5
				Marketing Tourism Tax (MTT)		0.2	0.2	0.2	0.3	0.3	0.3	0.3	0.3	0.3
				Other		2.8	3.5	3.1	3.9	2.6	2.6	2.6	2.6	2.6
			Nontax			3.4	3.1	4.1	4.8	4.8	4.8	4.8	4.8	4.7
				Fees and charges		2.0	1.8	2.1	2.3	2.3	2.3	2.3	2.3	2.3
				Dividends from parastatals		0.9	1.2	1.7	2.1	2.1	2.1	2.1	2.1	2.1
				Other		0.5	0.1	0.2	0.3	0.3	0.3	0.3	0.3	0.3
	External grants					3.2	0.8	1.3	3.2	2.2	1.6	0.8	0.7	0.7
Expenditure and net lending						34.9	33.0	38.2	41.9	40.0	39.0	37.8	37.4	37.0
	Current expenditure					28.0	28.0	33.1	33.5	32.8	32.0	31.1	30.2	29.5
		Primary current expenditure				25.7	24.9	29.3	29.4	28.9	28.5	28.0	27.7	27.4
			Wages and salaries 3			7.2	9.6	10.5	11.1	10.7	10.4	10.1	9.7	9.4
			Goods and services 3			7.5	11.6	13.1	12.8	12.8	12.8	12.7	12.7	12.7
			Transfers 3			10.8	3.6	5.6	5.4	5.2	5.1	5.1	5.1	5.1
				Social program of central government		2.0	0.4	0.7	0.7	0.7	0.7	0.7	0.7	0.7
				Transfers to public sector from central government		6.2	0.7	0.4	0.3	0.3	0.3	0.3	0.3	0.3
				Benefits and programs of Social Security Fund		2.6	2.5	4.5	4.4	4.2	4.2	4.2	4.2	4.2
			Other			0.1	0.2	0.1	0.2	0.2	0.2	0.2	0.2	0.2
		Interest due				2.4	3.1	3.8	4.1	3.9	3.5	3.1	2.5	2.1
			Foreign interest			1.0	1.0	1.0	1.1	1.0	1.1	1.1	1.1	1.0
			Domestic interest			1.3	2.1	2.8	3.0	2.9	2.4	2.0	1.4	1.1
	Capital expenditure					5.9	4.4	4.8	7.2	6.3	5.9	5.7	5.6	5.9
			Domestically financed			3.8	3.6	3.4	3.3	3.3	3.3	3.7	4.0	4.0
			Foreign financed			2.1	0.8	1.4	3.9	3.0	2.6	2.0	1.6	1.9
	Net lending					0.7	0.4	0.2	1.0	0.8	0.9	0.8	1.4	1.3
	Contingency					0.3	0.3	0.2	0.1	0.2	0.2	0.2	0.2	0.2
Primary balance						4.9	4.3	3.4	3.0	3.0	3.0	3.0	3.0	3.0
Overall balance, commitment basis 4						2.5	1.2	−0.4	−1.1	−0.9	−0.4	−0.1	0.5	0.9
Change in arrears						0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Change in float						−0.4	−0.3	−1.1	0.0	0.0	0.0	0.0	0.0	0.0
Overall balance, cash basis (after grants)						2.1	0.9	−1.4	−1.1	−0.9	−0.4	−0.1	0.5	0.9
Financing						−2.1	−0.9	1.4	1.1	0.9	0.4	0.1	−0.5	−0.9
	Foreign financing					0.0	−0.5	−1.6	0.1	0.6	0.2	1.0	0.0	0.2
			Disbursements			1.3	0.6	1.5	2.6	2.8	2.5	3.6	2.8	3.1
				Project loans		0.0	0.0	0.1	1.9	2.2	2.5	3.6	2.8	3.1
				Program/budget support		1.3	0.5	1.4	0.7	0.6	0.0	0.0	0.0	0.0
			Scheduled amortization			−1.3	−1.0	−3.1	−2.5	−2.2	−2.3	−2.6	−2.9	−2.9
			Of which Paris Club buy-back			…	…	−1.4	…	…
	Domestic financing, net					−2.4	0.7	3.0	0.5	−0.7	0.3	−0.9	−0.5	−1.1
		Bank financing				−5.1	−0.9	2.0	0.4	−0.6	0.2	−0.8	−0.4	−1.0
				CBS		−6.3	−2.7	−1.0	0.0	2.1	2.9	2.5	0.8	0.7
				Commercial banks		1.2	1.7	3.0	0.4	−2.7	−2.7	−3.3	−1.2	−1.7
		Nonbank				2.7	1.6	1.0	0.0	−0.1	0.0	−0.1	0.0	−0.1
		Privatization and long-term lease of fixed assets				0.5	0.3	0.4	0.5	1.0	0.0	0.0	0.0	0.0
	Transfer of SSF deposits to SPF					…	−1.0	…	…	…
Statistical discrepancy						−0.2	−0.5	−0.4	0.0	0.0	0.0	0.0	0.0	0.0
Memorandum items:
	Nominal GDP (millions of Seychelles Rupees)					17,119	18,336	19,033	20,022	21,259	22538.9	23969.0	25498.1	27123.5
	Transfer of assets of SSF to SPF
	Pension Fund contribution					1.1	1.1	1.3	1.0	1.0	1.0	1.0	1.0	1.0
	Pension Fund benefits payment					0.4	0.5	0.5	0.8	0.8	0.8	0.9	0.9	0.9
	Pension Fund operating expenses					0.1	0.2	0.2	0.2	0.2	0.2	0.1	0.1	0.1
	Public domestic debt (% GDP) 5					31.7	32.9	36.8	35.5	30.6	26.2	21.2	18.7	15.8
		Excluding t-bills issued for monetary purposes				20.7	19.5	20.6	20.1	18.3	17.5	15.5	14.1	12.2
	Publicly guaranteed domestic debt (% GDP)					1.8	1.9	3.4	3.4	2.9	2.5	2.2	2.2	2.2

Sources: Seychelles authorities; and IMF staff estimates and projections.

¹Includes the central government and the social security system.

²VAT replaced GST in January 2013.

³CSR and MTT were subsumed into Business Tax in CR 14/186.

⁴From 2015 onwards, wage and salaries and goods and services (to be) spent by government agencies other than Ministries are reclassified into these items from transfers.

⁵Only interest payments on foreign debt are on a commitment basis. Other expenditures are recorded when checks are issued or transfers initiated.

View Table

Table 2.

Seychelles: Consolidated Government Operations, 2014–22 ¹

						2014	2015	2016	2017	2018	2019	2020	2021	2022
						Act.	Act.	Prel.	Proj.	Proj.	Proj.	Proj.	Proj.	Proj.
						(Millions of Seychelles rupees)
Total revenue and grants						6,413	6,276	7,205	8,175	8,315	8,679	9,055	9,661	10,271
	Total revenue					5,870	6,132	6,965	7,527	7,846	8,327	8,859	9,482	10,078
			Tax			5,294	5,557	6,188	6,574	6,835	7,255	7,719	8,269	8,790
				Personal income tax		878	948	939	898	806	874	940	1,006	1,071
				Trade tax		376	326	359	335	354	371	391	458	480
				Excise tax		858	962	1,144	1,258	1,475	1,558	1,653	1,768	1,881
				Goods and services tax (GST) / VAT 2		1,803	1,803	1,996	2,125	2,272	2,409	2,562	2,725	2,899
				Business tax 3		782	757	1,039	1,019	1,210	1,283	1,364	1,451	1,544
				Corporate Social Responsibility Tax (CSR) 3		84	79	87	91	97	103	109	116	124
				Marketing Tourism Tax (MTT) 3		40	45	45	61	65	69	73	78	83
				Other		472	637	581	788	556	589	626	666	709
			Nontax			576	575	777	952	1,011	1,072	1,140	1,213	1,288
				Fees and charges		347	322	403	469	498	528	561	597	633
				Dividends from parastatals		151	228	330	429	456	483	514	547	582
				Other		78	25	44	55	58	61	65	69	73
	External grants					543	144	240	648	468	351	196	179	194
Expenditure and net lending						5,981	6,057	7,277	8,394	8,500	8,780	9,071	9,539	10,032
		Current expenditure				4,798	5,130	6,295	6,712	6,966	7,208	7,459	7,713	8,010
			Primary current expenditure			4,393	4,566	5,581	5,891	6,135	6,427	6,723	7,070	7,436
				Wages and salaries 4		1,229	1,753	2,002	2,223	2,284	2,344	2,414	2,486	2,560
				Goods and services 4		1,288	2,126	2,489	2,561	2,719	2,883	3,035	3,228	3,434
				Transfers 4		1,855	659	1,063	1,072	1,096	1,161	1,233	1,312	1,396
					Social program of central government	343	79	130	132	141	148	157	167	177
					Transfers to public sector from central government	1,070	123	80	60	63	67	71	75	80
					Benefits and programs of Social Security Fund	442	458	853	880	892	946	1,006	1,070	1,138
				Other		21	29	27	35	37	39	41	44	46
			Interest due			404	564	714	821	831	781	736	643	574
				Foreign interest		175	181	190	212	204	250	265	288	265
				Domestic interest		229	383	524	609	627	531	471	356	309
		Capital expenditure				1,011	801	909	1,447	1,339	1,334	1,369	1,439	1,611
				Domestically financed		656	651	644	667	708	751	893	1,030	1,083
				Foreign financed		355	150	265	780	631	584	476	409	528
		Net lending				120	77	35	210	160	200	203	345	366
		Contingency				53	49	38	25	35	37	39	42	45
	Primary balance					836	783	642	603	645	680	720	766	813
	Overall balance, commitment basis 5					431	219	−72	−219	−186	−101	−16	122	239
	Change in float					−70	−48	−201	0	0	0	0	0	0
	Overall balance, cash basis (after grants)					361	171	−273	−219	−186	−101	−16	122	239
	Financing					−361	−171	273	219	186	101	16	−122	−239
		Foreign financing				8	−84	−304	19	130	43	240	−2	49
			Disbursements			230	102	287	512	605	563	873	724	831
				Project loans		4	6	25	375	468	563	873	724	831
				Program/budget support		226	96	262	137	137	0	0	0	0
			Scheduled amortization			−222	−186	−591	−493	−475	−520	−633	−727	−796
				Of which Paris Club buy-back		…	…	−269	…	…
		Domestic financing, net				−412	130	578	99	−147	58	−224	−120	−288
			Bank financing			−873	−172	389	89	−132	52	−202	−108	−259
				CBS		−1,076	−488	−191	0	450	650	600	200	200
				Commercial banks		203	316	579	89	−582	−598	−802	−308	−459
			Nonbank financing			461	302	190	10	−15	6	−22	−12	−29
		Privatization and long-term lease of fixed assets				77	46	76	101	202	0	0	0	0
		Transfer of SSF deposits to SPF				…	−176	…	…	…
	Statistical discrepancy					−34	−86	−77	0	0	0	0	0	0
	Memorandum item:
		Pension Fund contribution				180	196	251	210	220	231	242	255	268
		Pension Fund benefits payment				77	85	91	160	174	189	206	224	244
		Pension Fund operating expenses				21	36	37	31	33	34	36	37	39
		External debt service due				397	367	781	705	679	770	898	1,014	1,062
						(Percent of GDP)
Total revenue and grants						37.5	34.2	37.9	40.8	39.1	38.5	37.8	37.9	37.9
	Total revenue					34.3	33.4	36.6	37.6	36.9	36.9	37.0	37.2	37.2
			Tax			30.9	30.3	32.5	32.8	32.1	32.2	32.2	32.4	32.4
				Personal income tax		5.1	5.2	4.9	4.5	3.8	3.9	3.9	3.9	3.9
				Trade tax		2.2	1.8	1.9	1.7	1.7	1.6	1.6	1.8	1.8
				Excise tax		5.0	5.2	6.0	6.3	6.9	6.9	6.9	6.9	6.9
				Goods and services tax (GST) / VAT 2		10.5	9.8	10.5	10.6	10.7	10.7	10.7	10.7	10.7
				Business tax		4.6	4.1	5.5	5.1	5.7	5.7	5.7	5.7	5.7
				Corporate Social Responsibility Tax (CSR)		0.5	0.4	0.5	0.5	0.5	0.5	0.5	0.5	0.5
				Marketing Tourism Tax (MTT)		0.2	0.2	0.2	0.3	0.3	0.3	0.3	0.3	0.3
				Other		2.8	3.5	3.1	3.9	2.6	2.6	2.6	2.6	2.6
			Nontax			3.4	3.1	4.1	4.8	4.8	4.8	4.8	4.8	4.7
				Fees and charges		2.0	1.8	2.1	2.3	2.3	2.3	2.3	2.3	2.3
				Dividends from parastatals		0.9	1.2	1.7	2.1	2.1	2.1	2.1	2.1	2.1
				Other		0.5	0.1	0.2	0.3	0.3	0.3	0.3	0.3	0.3
	External grants					3.2	0.8	1.3	3.2	2.2	1.6	0.8	0.7	0.7
Expenditure and net lending						34.9	33.0	38.2	41.9	40.0	39.0	37.8	37.4	37.0
	Current expenditure					28.0	28.0	33.1	33.5	32.8	32.0	31.1	30.2	29.5
		Primary current expenditure				25.7	24.9	29.3	29.4	28.9	28.5	28.0	27.7	27.4
			Wages and salaries 3			7.2	9.6	10.5	11.1	10.7	10.4	10.1	9.7	9.4
			Goods and services 3			7.5	11.6	13.1	12.8	12.8	12.8	12.7	12.7	12.7
			Transfers 3			10.8	3.6	5.6	5.4	5.2	5.1	5.1	5.1	5.1
				Social program of central government		2.0	0.4	0.7	0.7	0.7	0.7	0.7	0.7	0.7
				Transfers to public sector from central government		6.2	0.7	0.4	0.3	0.3	0.3	0.3	0.3	0.3
				Benefits and programs of Social Security Fund		2.6	2.5	4.5	4.4	4.2	4.2	4.2	4.2	4.2
			Other			0.1	0.2	0.1	0.2	0.2	0.2	0.2	0.2	0.2
		Interest due				2.4	3.1	3.8	4.1	3.9	3.5	3.1	2.5	2.1
			Foreign interest			1.0	1.0	1.0	1.1	1.0	1.1	1.1	1.1	1.0
			Domestic interest			1.3	2.1	2.8	3.0	2.9	2.4	2.0	1.4	1.1
	Capital expenditure					5.9	4.4	4.8	7.2	6.3	5.9	5.7	5.6	5.9
			Domestically financed			3.8	3.6	3.4	3.3	3.3	3.3	3.7	4.0	4.0
			Foreign financed			2.1	0.8	1.4	3.9	3.0	2.6	2.0	1.6	1.9
	Net lending					0.7	0.4	0.2	1.0	0.8	0.9	0.8	1.4	1.3
	Contingency					0.3	0.3	0.2	0.1	0.2	0.2	0.2	0.2	0.2
Primary balance						4.9	4.3	3.4	3.0	3.0	3.0	3.0	3.0	3.0
Overall balance, commitment basis 4						2.5	1.2	−0.4	−1.1	−0.9	−0.4	−0.1	0.5	0.9
Change in arrears						0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Change in float						−0.4	−0.3	−1.1	0.0	0.0	0.0	0.0	0.0	0.0
Overall balance, cash basis (after grants)						2.1	0.9	−1.4	−1.1	−0.9	−0.4	−0.1	0.5	0.9
Financing						−2.1	−0.9	1.4	1.1	0.9	0.4	0.1	−0.5	−0.9
	Foreign financing					0.0	−0.5	−1.6	0.1	0.6	0.2	1.0	0.0	0.2
			Disbursements			1.3	0.6	1.5	2.6	2.8	2.5	3.6	2.8	3.1
				Project loans		0.0	0.0	0.1	1.9	2.2	2.5	3.6	2.8	3.1
				Program/budget support		1.3	0.5	1.4	0.7	0.6	0.0	0.0	0.0	0.0
			Scheduled amortization			−1.3	−1.0	−3.1	−2.5	−2.2	−2.3	−2.6	−2.9	−2.9
			Of which Paris Club buy-back			…	…	−1.4	…	…
	Domestic financing, net					−2.4	0.7	3.0	0.5	−0.7	0.3	−0.9	−0.5	−1.1
		Bank financing				−5.1	−0.9	2.0	0.4	−0.6	0.2	−0.8	−0.4	−1.0
				CBS		−6.3	−2.7	−1.0	0.0	2.1	2.9	2.5	0.8	0.7
				Commercial banks		1.2	1.7	3.0	0.4	−2.7	−2.7	−3.3	−1.2	−1.7
		Nonbank				2.7	1.6	1.0	0.0	−0.1	0.0	−0.1	0.0	−0.1
		Privatization and long-term lease of fixed assets				0.5	0.3	0.4	0.5	1.0	0.0	0.0	0.0	0.0
	Transfer of SSF deposits to SPF					…	−1.0	…	…	…
Statistical discrepancy						−0.2	−0.5	−0.4	0.0	0.0	0.0	0.0	0.0	0.0
Memorandum items:
	Nominal GDP (millions of Seychelles Rupees)					17,119	18,336	19,033	20,022	21,259	22538.9	23969.0	25498.1	27123.5
	Transfer of assets of SSF to SPF
	Pension Fund contribution					1.1	1.1	1.3	1.0	1.0	1.0	1.0	1.0	1.0
	Pension Fund benefits payment					0.4	0.5	0.5	0.8	0.8	0.8	0.9	0.9	0.9
	Pension Fund operating expenses					0.1	0.2	0.2	0.2	0.2	0.2	0.1	0.1	0.1
	Public domestic debt (% GDP) 5					31.7	32.9	36.8	35.5	30.6	26.2	21.2	18.7	15.8
		Excluding t-bills issued for monetary purposes				20.7	19.5	20.6	20.1	18.3	17.5	15.5	14.1	12.2
	Publicly guaranteed domestic debt (% GDP)					1.8	1.9	3.4	3.4	2.9	2.5	2.2	2.2	2.2

Sources: Seychelles authorities; and IMF staff estimates and projections.

¹Includes the central government and the social security system.

²VAT replaced GST in January 2013.

³CSR and MTT were subsumed into Business Tax in CR 14/186.

⁴From 2015 onwards, wage and salaries and goods and services (to be) spent by government agencies other than Ministries are reclassified into these items from transfers.

⁵Only interest payments on foreign debt are on a commitment basis. Other expenditures are recorded when checks are issued or transfers initiated.