IMF reports healthy economic growth |21 October 2011

The mission – which is led by Jean Le Dem – has been in the country for two weeks reviewing the IMF’s extended fund programme.

Its other members were present at a press conference where Mr Le Dem gave the mission’s findings.

Also present were Vice-President Danny Faure – who is also the Minister for Finance and Trade, principal secretary in the ministry Ahmed Afif and Central Bank governor Pierre Laporte, who answered questions from members of the local media.

The mission however noted that consumer price inflation rose from zero in 2010 to 3.3% last month due to global food and oil prices.

Mr Le Dem said inflation will remain low although it will increase slightly, while Mr Laporte noted that compared with other countries which see up to and above 10% increases, Seychelles inflation is quite low.

“At the same time, domestic demand pressures remain contained by prudent fiscal and monetary policies,” said Mr Le Dem.

“Good progress was made in implementing the IMF-supported programme despite delays in implementing several structural measures.

“All end-June 2011 quantitative targets under the programme were met and most of the missed structural benchmarks are expected to be fulfilled by December.

“Public debt is projected to decline further in 2011 to about 76% of GDP at end-year,” said Mr Le Dem.

He said growth prospects for Seychelles in 2012 are positive despite the global environment and GDP is projected to grow by 4% with the 12-month inflation dropping to 3.5% by year end.

The mission is encouraging the authorities to continue with public enterprise reforms to optimise the role of the state in the economy while fostering private sector-led growth.

It therefore welcomes the planned steps to divest government’s non-strategic role and to streamline Air Seychelles operations to better adapt it to market conditions, making it financially viable.