- The economy of Seychelles, which was hard hit by crisis last year, is now quickly recovering from recession, according to a new report. Growth will hit 4 percent already this year.
A mission of the International Monetary Fund (IMF) has been in Seychelles for the last two weeks, meeting with President James Michel, Finance Minister Danny Faure and other Seychellois leaders, together analysing new data and trends of the country's economy.
The conclusion of the analysis was more positive than expected by the market. Despite a pessimistic outlook last year, the IMF found clear signs of recovery in the Seychellois economy, with structural reforms having had a quick effect.
"The economy is recovering from a recession that put real gross domestic product (GDP) to almost a stand in 2009. Real GDP is projected to grow at 4 percent in 2010, reflecting primarily a rebound in tourism earnings," concluded IMF mission leader Le Dem.
But not only the recovery of the tourism sector had caused the economy to turn from recession to growth, Mr Dem noted. "Strong progress is being made by the Seychelles authorities in their reform programme," he added.
"The programme is on track and is achieving its economic stabilisation and reform objectives. All end-March 2010 quantitative targets under the programme were met with margins and good progress has been achieved in the ambitious program of structural reforms," the IMF analyst praised the Seychelles government.
The recovery of the tourism sector thus was only good extra news for government, as the unexpected growth in government revenues from the sector would help financing remaining reform objectives. "Good government revenue performance so far will facilitate the implementation of key projects, notably in the area of public infrastructure, while providing for a more rapid return to fiscal sustainability," the IMF found.
The Fund "congratulated" the government of Seychelles on its quick successes in launching and implementing reforms that put an end to the archipelago's growing economic crisis. Tough reforms were implemented in short time last year.
Implemented reforms included key steps toward the introduction of a simple, fair and equitable tax system, the strengthening of public financial management and the modernisation of central bank operations. Current reforms aim at modernising the financial sector and improving the governance and performance of public enterprises.
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