Washington, DC:The Executive Board of the International
Monetary Fund (IMF) approved today for Seychelles a three-year arrangement
under the Extended Fund Facility (EFF), in the amount of SDR 42.365 million
(about US$56 million), and a three-year arrangement under the Resilience and
Sustainability Facility (RSF), in the amount of SDR 34.35 million (about
US$46 million).
The new EFF for Seychelles will replace the EFF approved on July 29, 2021
(2021
EFF). Under the 2021 EFF arrangement, the authorities satisfactorily
implemented policies to restore macroeconomic stability in the face of
multiple shocks, including the COVID-19 pandemic disruptions. All
quantitative targets through end-December 2022 were met and all but one
structural benchmark were met or implemented with delay. The new EFF will
build on progress made under the 2021 EFF to strengthen macroeconomic
stability while emphasizing reforms to boost investments in human and
physical capital to support inclusive growth. Efforts will also focus on
strengthening fiscal and monetary policy frameworks.
The RSF will support the authorities’ agenda to build resilience to climate
change by lifting bottlenecks to climate-related investments and by
facilitating the integration of climate-related considerations into
macroeconomic policies and frameworks. The RSF arrangement for Seychelles,
the second in Africa, will exploit synergies with other sources of public
financing and help catalyze further private financing for climate-related
investments.
Following the Executive Board’s discussion, Gita Gopinath, First Deputy
Managing Director and Acting Chair of the Board, issued the following
statement:
“Under the 2021 EFF, the Seychellois economy showed resilience to shocks,
including the COVID-19 pandemic and Russia’s war in Ukraine. The
authorities’ policy measures helped the economy recover quickly from the
pandemic-related disruptions and provided necessary support for households
and the private sector. Strong growth and better than expected fiscal
outturns contributed to the rapid decline in public debt and the
restoration of macroeconomic stability. Monetary policy has remained
appropriately accommodative in light of moderate inflation. However, the
authorities should remain vigilant to signs of inflationary pressures and
adjust the monetary policy stance if needed.
The outlook is positive, with tourism almost back to its pre-pandemic level
and inflation projected to remain moderate. However, Seychelles continues
to face substantial risks, including from global financial and economic
developments, which could severely impact tourism, and climate change.
The new EFF arrangement will protect macroeconomic stability and rebuild
buffers, while helping to advance the authorities’ reform agenda. Fiscal
consolidation efforts through revenue gains, prudent spending, and
improvements in Public Financial Management will help reduce debt
vulnerabilities and create fiscal space for priority spending, including
social spending and investment in climate change adaptation and mitigation.
The authorities are also committed to continue reforms to boost inclusive
growth by improving social protection targeting and investing in human
capital. Reforms are also planned to improve the monetary policy
implementation framework and to strengthen the resilience of the financial
system.
The authorities plan to leverage the RSF to undertake reforms to remove
bottlenecks to, and strengthen the climate-resilience of, public
investment. The RSF will also help authorities catalyze further private
financing and exploit synergies with other official financing. In
particular, the RSF will focus on mainstreaming climate change in the
government budget, strengthening climate-related risk management for
financial institutions, and undertaking climate adaptation and mitigation
reforms, including through measures to facilitate energy transition.”
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Seychelles: Selected Economic Indicators (2020-2028)
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2020
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2021
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2022
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2023
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2024
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2025
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2026
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2027
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2028
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Act.
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Prel.
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Proj.
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National income and prices
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Nominal GDP (millions of Seychelles rupees)
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21,458
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23,209
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26,112
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27,666
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29,309
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31,366
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33,554
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35,909
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38,317
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Real GDP (millions of Seychelles rupees)
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19,987
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21,062
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22,966
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23,952
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24,943
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25,908
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26,901
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27,942
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28,948
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Real GDP
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-7.7
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5.4
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9.0
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4.3
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4.1
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3.9
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3.8
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3.9
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3.6
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CPI (annual average)
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1.2
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9.8
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2.6
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1.4
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2.0
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3.5
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3.5
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3.5
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3.5
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CPI (end-of-period)
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3.8
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7.9
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2.5
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2.2
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2.4
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3.6
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3.5
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3.5
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3.5
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GDP deflator average
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0.7
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2.6
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3.2
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1.6
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1.7
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3.0
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3.0
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3.0
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3.0
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Money and credit
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Broad money
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29.1
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5.8
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4.4
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…
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…
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…
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…
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…
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…
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Reserve money (end-of-period)
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40.4
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11.1
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-3.0
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…
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…
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…
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…
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…
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…
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Velocity (GDP/broad money)
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0.9
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0.9
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0.9
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…
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…
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…
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…
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…
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…
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Money multiplier (broad money/reserve money)
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3.9
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3.7
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4.0
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…
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…
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…
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…
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…
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…
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Credit to the private sector 5
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20.2
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-11.9
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4.9
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7.3
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8.0
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7.8
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7.6
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7.4
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7.4
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Savings-Investment balance
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(Percent of GDP, unless otherwise indicated)
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External savings
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14.0
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11.0
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7.6
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9.5
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10.1
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10.7
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10.7
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10.8
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11.5
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Gross national savings
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8.4
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15.0
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15.5
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16.2
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16.7
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16.2
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16.1
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16.1
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15.2
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Of which: government savings
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-13.4
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-3.3
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0.8
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1.4
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2.5
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4.0
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5.0
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6.0
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6.5
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private savings
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21.8
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18.3
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14.7
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14.8
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14.2
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12.2
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11.0
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10.1
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8.7
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Gross investment
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22.3
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25.9
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23.1
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25.7
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26.8
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27.0
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26.8
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26.8
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26.7
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Of which: public investment 1
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4.8
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5.6
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2.7
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5.2
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6.3
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6.4
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6.2
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6.2
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6.1
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private investment
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17.5
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20.3
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20.4
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20.5
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20.5
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20.6
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20.6
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20.6
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20.6
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Private consumption
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38.5
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42.8
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46.8
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45.6
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45.3
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48.0
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48.8
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49.6
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50.3
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Government budget 4
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Total revenue, excluding grants
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33.3
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33.0
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33.3
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34.3
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34.8
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34.9
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34.9
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34.7
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34.6
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Expenditure and net lending
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53.3
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42.4
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35.3
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38.7
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38.8
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37.3
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36.0
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34.8
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34.0
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Current expenditure
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46.8
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36.6
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32.5
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33.0
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32.3
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31.1
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29.8
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28.7
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28.1
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Capital expenditure 1
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4.8
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5.7
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2.7
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5.2
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6.3
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6.4
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6.2
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6.2
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6.1
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Overall balance, including grants
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-19.0
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-6.0
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-1.6
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-2.9
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-2.5
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-1.4
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-0.2
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0.8
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1.3
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Primary balance
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|
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Primary balance
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-15.2
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-3.2
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0.7
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-0.4
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0.2
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1.0
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2.0
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2.8
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3.0
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Total government and government-guaranteed debt
2
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91.9
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80.8
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69.2
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67.6
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66.0
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63.1
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59.6
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55.3
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51.2
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External sector
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|
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Current account balance including official transfers
(in percent of GDP)
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-14.0
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-11.0
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-7.6
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-9.5
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-10.1
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-10.7
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-10.7
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-10.8
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-11.5
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Total external debt outstanding (millions of U.S.
dollars) 3
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5,049
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5,261
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5,391
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5,584
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5,791
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5,994
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6,111
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6,191
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6,050
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(percent of GDP)
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414.2
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382.9
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293.2
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285.0
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279.0
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269.8
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257.2
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243.4
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223.0
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Terms of trade (-=deterioration)
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10.6
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-5.0
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-8.4
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1.8
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6.4
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5.3
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0.0
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0.0
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0.0
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Gross official reserves (end of year, millions of U.S.
dollars)
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575
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702
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639
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655
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700
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787
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824
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847
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858
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Months of imports, c.i.f.
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3.8
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3.7
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3.6
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3.4
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3.5
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3.8
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3.8
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3.8
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3.7
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In percent of Assessing Reserve Adequacy (ARA) metric
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111
|
119
|
100
|
100
|
102
|
112
|
115
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117
|
115
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Exchange rate
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|
|
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|
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Seychelles rupees per US$1 (end-of-period)
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21.0
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14.7
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14.3
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…
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…
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…
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…
|
…
|
…
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Seychelles rupees per US$1 (period average)
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17.6
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16.9
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14.2
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…
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…
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…
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…
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…
|
…
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|
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Sources: Central Bank of Seychelles; Ministry of Finance;
and IMF staff estimates and projections.
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1Includes onlending to the parastatals for
investment purposes.
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2Includes debt issued by the Ministry of
Finance for monetary purposes.
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3Includes private external debt.
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4The fiscal program targets at the approval of
the EFF are now presented in percent of the new GDP.
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