In a press release, the International Monetary Fund (IMF) has praised the ongoing results of the economic programme, saying that “economic policies continue to be anchored by prudent fiscal policies”.

With this success Seychelles qualifies for another instalment of US $3.3 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 Seychelles’ economic performance, bringing the total amount of disbursements under the EFF to US $7.8 million.

The IMF said Seychelles’ economy has proved remarkably resilient to the double crisis it experienced.
A spokesman 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 on 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% in 2009, and growth is projected to recover further to 4%  in 2010.”
Seychelles’ programme remains fully on track and all quantitative performance criteria at end-March 2010 were met, the IMF said.

The press release added that government revenue is exceeding expectations in 2010, making it easier to carry out key public infrastructure projects.

“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,” said the IMF.

“Progress on structural reforms is also good. On tax reforms, the business tax was rationalised and a personal income tax introduced. The next challenges will be to further broaden the tax base, reduce tax rates, modernise 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.”

The press release said the restructure of Seychelles’ external debt is progressing well. Strong policies have convinced most creditors to bring back external debt to sustainable levels, partly through the completion of a debt exchange with private creditors in February.

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