05.20.10
IMF says Seychelles’ Economy is resilient to shocks
According to the International Monetary Fund (IMF), the economy of Seychelles has shown strong resilience to global financial shocks of the year 2009. The IMF said that the jurisdiction’s economy is recovering faster than expected from measures taken to adjust it.
The above-mentioned conclusions are the key findings of an International Monetary Fund mission in Seychelles since May 4. The IMF has already completed mission’s 1st review under the Extended Fund Facility. The mission is headed by Jean Le Dem.
The success of the review of the mission was announced during a press conference that was held at the Central Bank on May 17. The conference was attended by Minister for Finance Danny Faure, his principal secretary Ahmed Afif and the head of division, policy, market operations and statistics Caroline Abel.
Mr Le Dem described the discussions as successful. He said that all quantitative performance criteria as of the end of March 2010 have been met and structural measures programmed to end in April 2010 have been carried out, as well as policies for the rest of the year 2010 have been agreed with the government.
In his statement, Le Dem highlighted some of the findings of the IMF mission:
- the macro-economic situation has improved; the economy has shown strong resilience and flexibility to the shocks in 2009 and is recovering more quickly than initially expected from adjustment policies;
- economic activities have been maintained overall in 2009, notably in the tourism sector, due to an aggressive price policy which has made it possible to maintain hotel occupancy rates and employment in that sector;
- the exchange rate has stabilised on average against the main currencies since the beginning of the year 2010 and the external position is strengthening, with international reserves already covering 2 months of imports.
Le Dem also stated that the assessment of government revenue projections for 2010 that was discussed during the mission provides room for a more rapid path towards fiscal sustainability. Seychelles’ monetary policy has been loosened, while key interest rates like treasury bill rates have been reduced to lower levels. Measures to promote private sector development have been good, especially on tax reforms, public finance management, reorganisation of Central Bank operations, financial sector supervision and public enterprise reform.
He stressed the 2 major areas that are crucial to the reform programme – the tax system and private sector development.
The 2nd review mission is expected in October 2010.
Seychelles’ Minister for Finance Danny Faure suggested that the mission’s findings are encouraging and are good for our reform programme. He expressed his hopes that this will result in the last stage of debt cancellation.