Posted by: APO | 2 July 2010

IMF commends Seychelles’ economic performance ahead of next week’s Paris Club meeting



IMF commends Seychelles’ economic performance ahead of next week’s Paris Club meeting


VICTORIA, Seychelles, July 2, 2010/African Press Organization (APO)/ — The Seychelles economic reform programme has received a major boost ahead of next week’s Paris Club Meeting.

In a press release issued yesterday the IMF has commended the ongoing results of Seychelles’ economic programme, stating that “Economic policies continue to be anchored by prudent fiscal policies”.


With this success Seychelles qualifies for another instalment of USD3.3 million as part of the three-year Extended Fund Facility Arrangement (EFF).


This was announced after the IMF’s Executive Board completed the first review of the Seychelles’ economic performance, bringing the total amount of disbursements under the EFF to USD 7.8 million


The IMF says that the Seychelles economy has proved remarkably resilient to the double crisis it experienced.


A spokesperson for the Ministry of Finance said: “This is a positive result for the common efforts of all the Seychellois and how we have stayed together in this new economic journey”.


The IMF added: “Following a turnaround in its economic policies to address an external debt crisis and a global financial crisis in 2008, the country appears to have emerged from the recession. Real gross domestic product (GDP) grew by 0.7 percent in 2009 and growth is projected to recover further to 4 percent in 2010”.


The IMF says that the Seychelles programme remains fully on track and all quantitative performance criteria at end-March 2010 were met.


The press release goes on to say: “Government revenue is exceeding expectations in 2010, facilitating the implementation of key public infrastructure projects, while the decision to save part of the revenue over performance will strengthen fiscal and external sustainability.


“The maintenance of prudent policies has given credibility to the currency float introduced in November 2008. Inflation has virtually disappeared, allowing a reduction in key policy interest rates, and international reserves are being rebuilt.


“Progress on structural reforms is also good. On tax reforms, the business tax was rationalized and a personal income tax introduced. The next challenges will be to further broaden the tax base, reduce tax rates, modernize customs, and introduce a value-added tax in 2012.


“The authorities have also strengthened public finance and central bank management and are starting to address the restructuring of several key public enterprises and financial institutions, with a view to reducing the risks to the government budget and fostering sustained private sector-led growth.


“Restructuring of Seychelles’ external debt is progressing well. Strong policy implementation has convinced most external creditors to bring back external debt to sustainable levels, including through the completion of a debt exchange with private creditors in February 2010”.



Seychelles – Ministry of finance


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