As it has been said recently, the International Monetary Fund has released its report on Seychelles’ 4th programme review. In accordance with the review, the jurisdiction’s economic prospects are good. However, the report warns of risks from the crisis in Europe.

The Fund hails Seychelles’ performance with the IMF executive board’s deputy managing director and acting chair Min Zhu saying: “Aided by sound macroeconomic policies and timely structural reforms, the Seychelles economy rebounded strongly from the crisis of 2008-09. Medium-term prospects are good, but downside risks exist due to the crisis in Europe. Inflation has picked up recently, reflecting the delayed pass-through of global food and fuel price increases, but remains broadly in check.”

He noted that “safeguarding debt sustainability is critical for sustaining the gains from macroeconomic stabilization”. Also, he mentioned that “the restructuring of the loss-making national airline and increases in utility tariffs to cost-recovery levels will help achieve a sounder fiscal position while creating space for needed infrastructure investments”. So, developing a well-targeted social safety net will be vital to protect vulnerable groups.

According to Min Zhu, “Structural reforms continue to focus on improving public financial management and fostering private sector-led growth. In the financial sector, efforts should focus on limiting the role of state-owned institutions, strengthening competition, enhancing governance and transparency, and improving banking intermediation.”

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