Press Release No. 10/202

Press Release: IMF Mission Finds Seychelles’ New Three-Year Economic Program on Track

May 17, 2010

An International Monetary Fund (IMF) mission led by Mr. Jean Le Dem visited Victoria during May 4-17, 2010 to conduct discussions for the first program review under the Extended Fund Facility (EFF) Arrangement with Seychelles (see Press Release No. 09/472). The mission met with His Excellency President James Michel, Minister of Finance Danny Faure, Governor of the Central Bank of Seychelles Pierre Laporte and other senior government officials as well as representatives of the private sector, parliamentarians, and civil society.

At the conclusion of the visit, Mr. Le Dem issued the following statement:

“The economy is recovering from a recession that put real gross domestic product (GDP) to almost a stand in 2009. Real GDP is projected to grow at 4 percent in 2010, reflecting primarily a rebound in tourism earnings. Twelve-month inflation, which was negative during the past few months, is expected to return to about 1 percent by year-end.

“Strong progress is being made by the Seychelles authorities in their reform program. The program is on track and is achieving its economic stabilization and reform objectives. All end-March 2010 quantitative targets under the program were met with margins and good progress has been achieved in the ambitious program of structural reforms.

“Macroeconomic policies are appropriately geared towards consolidating macroeconomic stabilization and improving fiscal and debt sustainability. Good government revenue performance so far will facilitate the implementation of key projects, notably in the area of public infrastructure, while providing for a more rapid return to fiscal sustainability. We welcome the progress achieved in structural reforms, including important steps toward the introduction of a simple, fair and equitable tax system; the strengthening of public financial management; and the modernization of central bank operations. Seychelles has also made good progress in its public debt restructuring. The ongoing efforts to modernize the financial sector and improve the governance and performance of public enterprises will be crucial to sustain private sector growth.

“It is expected that the IMF's Executive Board will discuss the program review in late June 2010. The EFF arrangement, approved on December 22, 2009, is for SDR19.8 million (about US$31 million), of which SDR 3.08 million (about US$4.7 million) has been disbursed. SDR 2.2 million (about US$3.3 million) would be available upon completion of the first review. The second program review mission is expected in October 2010.

“The mission wishes to thank the authorities for their warm hospitality and the high quality of the technical discussions.”