Seychelles: Staff Report for the 2015 Article IV Consultation, Second Review Under the Extended Arrangement, and Request for Waiver and Modification of Performance Criteria
IMF Staff Country Reports, July 22, 2015
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- Seychelles: Staff Report for the 2015 Article IV Consultation, Second Review Under the Extended Arrangement, and Request for Waiver and Modification of Performance Criteria
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Bibliographic details
- Published: July 22, 2015
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513542652.002
Context and macroeconomic background
- Robust recovery from the 2008 balance of payments and debt crisis has resulted in improved economic and social outcomes.
- Continued policy discipline and reforms are necessary to mitigate geographical and population constraints and to maintain momentum toward a diversified and resilient economy.
Program focus and policy dialogue
- Fiscal policy anchored by the authorities’ debt reduction objective.
- Macroeconomic discussions concentrated on the smooth functioning of monetary and exchange rate policies.
- Structural dialogue emphasized policies to promote sustained and inclusive growth and clarified the appropriate role for state-owned enterprises (SOEs).
Review of program implementation
- The program is on track.
- The authorities met the end-December quantitative performance criteria except for narrowly exceeding the ceiling on reserve money.
- The structural agenda remains broadly on track despite some delays.
- Staff recommends:
- Completion of the second review under the Extended Arrangement.
- Modification of the performance criteria for end-June and end-December 2015.
- Approval of the authorities’ request for a waiver for the end-December 2014 performance criterion for reserve money.
Outlook and risks
- External position has stabilized since the last review and fundamentals are strengthening.
- Key external vulnerability: dependence on developments in key European markets.
- Key domestic vulnerability: risks centered on the role of SOEs.
Recommendations and policy priorities
- Fiscal anchor: the authorities’ objective of reducing public debt below 50 percent of GDP by 2018 is appropriate and attainable.
- Monetary policy: further enhance the framework by increasing its forward orientation in the context of a flexible exchange rate.
- Structural reforms should:
- Foster inclusiveness and private sector-led growth.
- Improve economic governance.
- Refocus the role and activities of SOEs.
Data and statistical priorities
- Data provision is broadly adequate for surveillance.
- Priority improvements include:
- Improved GDP statistics.
- Strengthening external sector statistics.
- Extending coverage of the international investment position.
IMF Staff Country Report — July 22, 2015; Pages: 104; Volume: 2015; Issue: 201; DOI: https://doi.org/10.5089/9781513542652.002; ISBN: 9781513542652