Seychelles

Seychelles has made substantial progress toward external viability and fiscal sustainability since the 2008 crisis under three successive Fund arrangements. The public debt to GDP ratio has been reduced by almost two thirds during the period, while international reserves coverage has improved to around four months of prospective imports from less than one month at end-2008. However, additional efforts are still needed to secure the hard-won economic stability, in view of the country’s vulnerability to external shocks and challenges to maintain fiscal discipline over the next few years. The authorities recently requested a new Policy Coordination Instrument (PCI), as the last Extended Arrangement expired in early June and the country no longer needs Fund financial assistance.