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· The executive board of the International Monetary Fund has approved US$105 million under its Extended Fund Facility for Seychelles
· An immediate disbursement of US$34.26 million will take place. The fund is meant to support the authorities’ efforts to restore macroeconomic stability and debt sustainability while strengthening the post COVID-19 recovery
· The new arrangement will support Seychelles’ post-pandemic recovery besides facilitating reform implementation and catalyze additional external financing
The executive board of the International Monetary Fund has approved US$105 million under its Extended Fund Facility for Seychelles. An immediate disbursement of US$34.26 million will take place. The fund is meant to support the authorities’ efforts to restore macroeconomic stability and debt sustainability while strengthening the post COVID-19 recovery.
According to the IMF authorities the Seychelles’ economic outlook is positive. But there are risks emanating from low number of tourist arrivals. Since March 2021 there has been a strong recovery. But the outlook is uncertain and contingent on the pandemic path. The effective rollout of vaccines in Seychelles’ key tourist markets and the expected recovery in external demand can have a positive in the tourist flows.
The new arrangement will support Seychelles’ post-pandemic recovery besides facilitating reform implementation and catalyze additional external financing. The travel restrictions and global economic downturn triggered unprecedented economic contraction. The authorities responded with measures to mitigate the economic fallout on businesses and households. Because of disruptions in traffic flows
the public debt ratio increased sharply, led to depreciation of the local currency , and GDP contraction. Seychelles led the world in vaccination coverage and reopened its borders. With tourist arrivals bouncing back, a recovery is now expected. The last time Seychelles embarked on economic reform was in 2008. to primarily address the serious balance of payments and external debt difficulties caused in the aftermath of global financial meltdown. .
