IMF Executive Board Completes Fourth Review Under the Policy Coordination Instrument for Seychelles
IMF News, December 18, 2019
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- Published: December 18, 2019
Review decision and instrument background
- On December 17, 2019, the Executive Board of the International Monetary Fund (IMF) completed the fourth review under the Policy Coordination Instrument (PCI) for Seychelles.
- The Executive Board’s decision was taken without a meeting.
- The PCI was approved on December 13, 2017. Seychelles was the first IMF member country to request a PCI. The PCI is a non-financing instrument available to members that do not need Fund financial resources at the time of approval and is designed for countries seeking to demonstrate commitment to a reform agenda or to unlock and coordinate financing from other official creditors or private investors.
Macroeconomic performance and outlook
- The implementation of the Seychelles’ economic program is largely on track.
- The 2019 economic growth is estimated to reach about 4 percent, reflecting strong output in the tourism and communication sectors.
- Macroeconomic performance continued to be strong in 2019.
- Inflation has been on a declining trend since early 2018.
- The gross international reserves remain at an adequate level.
- The near-to-medium-term economic outlook continues to be favorable, provided that the authorities maintain their prudent policies under the Policy Coordination Instrument.
Monetary policy and exchange rate
- The Central Bank of Seychelles (CBS) lowered the monetary policy rate at end-September 2019, citing benign inflationary pressures in the coming months.
- The CBS is committed to a flexible exchange rate, while being vigilant to both upside and downside risks to inflation.
Fiscal policy, public debt, and state-owned enterprises
- The authorities are committed to the primary fiscal surplus target of 2½ percent of GDP through 2022.
- The government aims to steadily reduce the public debt-to-GDP ratio over the medium term.
- The government intends to implement permanent measures envisaged in the 2020 budget.
- The government intends to keep a very tight rein on Air Seychelles’ financial position.
Structural agenda
- The structural agenda focuses on:
- strengthening the AML/CFT framework,
- buttressing financial stability,
- enhancing inclusive growth, including by improving the business climate.
IMF Communications Department, Press Release No. 19/468
