An IMF team led by Mission Chief Todd Schneider announced a staff level agreement on policies to complete the final reviews under the Extended Fund Facility and Resilience and Sustainability Facility arrangements, and seychelles would receive a disbursement of up to SDR 32.9 million, about $45 million, subject to approval.
IMF staff reported robust real GDP growth estimated at 5.1 percent, driven by record tourist arrivals and near zero consumer price inflation, as reported by the mission.
The mission said a primary fiscal surplus equal to 2.5 percent of GDP helped lower public and publicly guaranteed debt to 53.6 percent of GDP, while higher tourism earnings narrowed the external current account deficit to 6.5 percent of GDP and lifted central bank foreign exchange reserves to just over four months of import cover.
Performance under the IMF arrangements has been strong, the mission said, noting that midyear quantitative targets were met and all but one year end target achieved, and that most structural reforms have been completed or are near completion.
Two reforms will need more time, the IMF added, including a pilot retail window for banks to buy government securities which is delayed pending prerequisite infrastructure, namely a real time gross settlement system and a central securities depository.
The mission also reported that pilot functional reviews of the ministries of finance, education and health are now expected to be completed before the program ends, with World Bank support, and that climate related reforms under the RSF have made good progress.
UN Tourism Summit Preparations And Wider Risks
The Director for Africa at UN Tourism, Elcia Grandcourt, paid a courtesy call to Vice President Sebastien Pillay, meeting with Minister Amanda Bernstein and Principal Secretary Sherin Francis as seychelles prepares to host a landmark UN Tourism Commission for Africa meeting later this year.
Grandcourt said the gathering will bring ministers across the continent together to discuss workforce challenges and realities facing African destinations, and a parallel conference will focus on human capital and training, including the unveiling of a comprehensive survey covering African countries.
Both visitors and the IMF mission flagged external risks, with the mission warning that disruptions to air connectivity and tourist spending tied to the Middle East situation could slow growth to about 1.5 percent in the projection period and push inflation toward 2.6 percent.
The IMF recommended that the government prepare contingency measures on expenditure and revenue, target any additional support to vulnerable households, preserve exchange rate flexibility and press ahead with structural reforms to boost diversification, resilience and inclusive growth.
