IMF Executive Board Approves US$105.63 Million Extended Arrangement Under the Extended Fund Facility for Seychelles
IMF News, July 29, 2021
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- Published: July 29, 2021
Approval and Financing
- Executive Board approved a 32-month extended arrangement under the Extended Fund Facility (EFF) for Seychelles for SDR 74 million (US$105.63 million), or 323 percent of Seychelles’ quota.
- The Board’s approval allows for an immediate disbursement equivalent to US$ 34.26 million.
- The program includes a three-pillared, frontloaded adjustment comprising: fiscal adjustment, a liability management operation (LMO), and external support.
- The authorities successfully completed the LMO immediately after the conclusion of program discussions to significantly reduce rollover risks.
Economic impact of COVID-19 and recovery prospects
- Seychelles was hit hard by the COVID-19 crisis; authorities locked down the economy, keeping infection and fatality rates low, but travel restrictions and the global downturn triggered unprecedented economic contraction.
- Vaccination: As soon as vaccines became available, Seychelles led the world in vaccination coverage and reopened its borders.
- Recovery outlook: With tourist arrivals bouncing back, a V-shaped recovery is now expected, but risks remain high and the outlook is uncertain and contingent on the pandemic path, the effective rollout of vaccines in Seychelles’ key tourist markets, and the expected recovery in external demand.
Program objectives, policy priorities, and reforms
- Key objective: Support authorities’ efforts to restore macroeconomic stability and debt sustainability while strengthening the post COVID-19 recovery.
- The arrangement will support post-pandemic recovery, anchor reform implementation, and catalyze additional external financing.
- Policy priorities and reforms highlighted:
- Ambitious fiscal consolidation to reduce debt sustainability risks.
- Enhanced public financial debt management.
- Improved governance of state-owned enterprises.
- Modernization and revamping of the banking resolution and emergency liquidity assistance frameworks to safeguard financial stability.
- Financial sector modernization, including through digital finance.
- Improvements to the business environment to support private sector development and foster sustainable and inclusive growth.
- A capacity development strategy aligned with the program to achieve reform potential.
Selected Economic and Financial Indicators (selected lines and exact figures from table)
- Nominal GDP (millions of Seychelles rupees): 2016 18,989; 2017 20,858; 2018 21,540; 2019 22,192; 2020 20,021; 2021 23,585; 2022 26,219; 2023 28,889; 2024 31,235; 2025 33,781; 2026 36,464.
- Real GDP (millions of Seychelles rupees): 2016 8,423; 2017 8,843; 2018 8,960; 2019 9,132; 2020 7,957; 2021 8,506; 2022 9,160; 2023 9,780; 2024 10,266; 2025 10,781; 2026 11,297.
- Real GDP (annual percent change): 2016 4.4; 2017 5.0; 2018 1.3; 2019 1.9; 2020 -12.9; 2021 6.9; 2022 7.7; 2023 6.8; 2024 4.8.
- CPI (annual average): 2016 -1.0; 2017 2.9; 2018 3.7; 2019 1.8; 2020 1.2; 2021 10.0; 2022 3.2; 2023 3.0.
- CPI (end-of-period): 2016 -0.2; 2017 3.5; 2018 3.4; 2019 1.7; 2020 3.8; 2021 8.6; 2022 3.9.
- GDP deflator average: 2016 -0.8; 2017 4.6; 2018 1.1; 2019 10.2.
- Broad money (annual percent change): 2016 12.1; 2017 16.4; 2018 13.9; 2019 29.2.
- Reserve money (end-of-period, annual percent change): 2016 14.5; 2017 18.9; 2018 4.5; 2019 22.7; 2020 40.4.
- Money multiplier (broad money/reserve money): 4.3.
- Credit to the private sector (annual percent change): 2016 10.3; 2017 17.8; 2018 11.5; 2019 22.3; 2020 20.2; 2021 9.1; 2022 16.6; 2023 17.7; 2024 18.7; 2025 16.5; 2026 15.6.
- External savings (percent of GDP): 2016 20.6; 2017 19.6; 2018 16.1; 2019 29.5; 2020 25.7; 2021 22.0; 2022 19.8; 2023 16.9; 2024 15.5.
- Gross national savings (percent of GDP): 2016 9.6; 2017 9.2; 2018 7.8; 2019 -6.2; 2020 2.3; 2021 5.7; 2022 8.1; 2023 8.8; 2024 9.5; 2025 10.8.
- Government savings (percent of GDP, of which government savings): 2016 -13.8; 2017 -6.1; 2018 -1.1; 2019 2.6; 2020 5.3; 2021 5.8.
- Gross investment (percent of GDP): 2016 30.2; 2017 28.9; 2018 26.7; 2019 26.4; 2020 23.4; 2021 28.0; 2022 27.7; 2023 27.8; 2024 26.6; 2025 26.3.
- Private investment (percent of GDP): 2016 25.2; 2017 24.6; 2018 21.5; 2019 22.5; 2020 17.5; 2021 19.0; 2022 20.5; 2023 20.8.
- Private consumption (percent of GDP): 2016 47.1; 2017 50.9; 2018 52.6; 2019 49.9; 2020 54.9; 2021 56.1; 2022 54.8; 2023 52.7; 2024 53.4; 2025 52.1.
- Government budget: Total revenue, excluding grants (percent of GDP): 2016 36.7; 2017 35.0; 2018 37.1; 2019 37.6; 2020 35.7; 2021 30.7; 2022 33.1; 2023 34.3; 2024 36.2; 2025 36.8; 2026 37.2.
- Expenditure and net lending (percent of GDP): 2016 38.2; 2017 36.4; 2018 38.8; 2019 37.7; 2020 57.1; 2021 48.4; 2022 43.6; 2023 39.2; 2024 38.1; 2025 38.0; 2026 37.9.
- Current expenditure (percent of GDP): 2016 33.2; 2017 32.1; 2018 33.6; 2019 33.8; 2020 50.1; 2021 38.9; 2022 35.4; 2023 33.0; 2024 32.0; 2025 31.9.
- Overall balance, including grants (percent of GDP): 2016 -1.4; 2017 0.1; 2018 0.7; 2019 -0.9; 2020 -19.5; 2021 -13.6; 2022 -7.7; 2023 -2.9; 2024 -0.4; 2025 0.2.
- Primary balance (percent of GDP): 2016 0.0; 2017 3.1; 2018 2.8; 2019 -16.3; 2020 -9.7; 2021 -5.0.
- Total government and government-guaranteed debt (percent of GDP): 2016 72.8; 2017 65.7; 2018 62.3; 2019 61.8; 2020 100.8; 2021 87.7; 2022 87.6; 2023 83.0; 2024 77.2; 2025 71.2; 2026 64.5.
- Current account balance including official transfers (percent of GDP): 2016 -20.6; 2017 -19.6; 2018 -18.9; 2019 -16.1; 2020 -29.5; 2021 -25.7; 2022 -22.0; 2023 -19.8; 2024 -17.8; 2025 -16.9; 2026 -15.5.
- Total external debt outstanding (millions of U.S. dollars): 2016 4,299; 2017 4,475; 2018 4,682; 2019 4,874; 2020 5,093; 2021 5,452; 2022 5,823; 2023 6,147; 2024 6,362; 2025 6,588; 2026 6,830.
- Total external debt outstanding (percent of GDP): 2016 301.5; 2017 292.8; 2018 303.7; 2019 308.5; 2020 447.7; 2021 346.7; 2022 331.8; 2023 314.8; 2024 297.6; 2025 281.2; 2026 264.0.
- Terms of trade (-=deterioration): 2016 -3.3; 2017 10.6; 2018 -3.6; 2019 -4.1; 2020 0.9.
- Real effective exchange rate (average, percent change): 2016 -0.1; 2017 -3.2.
- Gross official reserves (end of year, millions of U.S. dollars): 2016 522.6; 2017 546; 2018 548; 2019 581; 2020 561; 2021 670; 2022 743; 2023 815; 2024 816; 2025 824; 2026 848.
- Months of imports, c.i.f.: 2016 4.0.
- In percent of Assessing Reserve Adequacy (ARA) metric: 2016 113.3; 2017 112.6; 2018 110.9; 2019 112.4; 2020 111.9; 2021 114.4; 2022 115.9; 2023 117.4; 2024 111.1; 2025 107.0; 2026 104.6.
- Exchange rate, Seychelles rupees per US$1 (end-of-period): 2016 13.5; 2017 13.8; 2018 14.0; 2019 14.1; 2020 21.6.
- Exchange rate, Seychelles rupees per US$1 (period average): 2016 13.3; 2017 13.6; 2018 17.6.
Source: IMF Press Release No. 21/234, July 29, 2021.