Seychelles' economy resilient, says IMF |06 March 2013

The remark was made by the head of the International Monetary Fund mission (IMF), Carol Baker, here on a week’s visit  for the seventh Programme Review under the Extended  Fund Facility Arrangement with Seychelles.

Speaking at a press conference yesterday, which was also attended by Finance, Trade and Investment Minister Pierre Laporte and Central Bank (CBS) Governor Caroline Abel, Ms Baker said the economic growth had held up thanks to increasing tourist arrivals from non-traditional markets, though the number of European visitors declined.

“Seychelles has out-performed many other island destinations,” said Ms Baker.
She noted that Seychelles probably has space for over 250,000 visitors and we are getting just over 200,000. 

She believes there is scope  for tourism linkages with small and medium enterprises, so that when tourists come to Seychelles, they can buy more locally produced goods.

Ms Baker said that thinking about development down the road is not to have industries that are not adapted to Seychelles, because we do not have the land nor the labour to do that.

Ms Baker said fiscal policies remained firmly on track, allowing the government  to meet its target to bring down public debt to 50% of Gross Domestic Product (GDP).
“The government of Seychelles has made sustained progress in implementing the IMF-sponsored programme, adding all end-December 2012 quantitative targets were met.

The mission welcomes the introduction of the Value Added Tax (Vat), which it says will modernise and strengthen the tax system. It is encouraging government to take all necessary steps to ensure that the Vat is applied efficiently.

Mr Laporte said the government is still committed to the privatisation programme of some state companies, such as the Seychelles Savings Bank.
He said 20% shares in the bank has already been sold and the target is 40%, adding that there is an interested foreign investor.

Responding to questions about the recent appreciation of the Seychelles rupee vis-a-vis major foreign currencies, Ms Abel said is not new, since the local currency started to pick up after the CBS intervention late last year.

She said that has been combined with reduced demand for imports and foreign travel. There was also fewer demand for loans.
Ms Abel said the tendency is set to continue for several more weeks.

In his state-of-the-nation address on February 19, President James Michel welcomed the gradual appreciation of the rupee, which has reached R12 to $1. He said he considers this to be the rate which will allow us to control inflation and also to ensure our competitiveness overseas.

President Michel said we can do it, but we need the active cooperation of the commercial banks to realise this objective.
“It is regrettable that they are not doing enough,” the President said in his address.