“Economic outlook for 2019 remains positive, says IMF
March 19, 2019
“Macroeconomic performance continued to be strong in 2018. Economic growth reached 4.1 percent, reflecting increased tourism earnings and stronger output in the fishing industry. Helped by prudent monetary policy and a stable exchange rate, inflation was contained throughout 2018.
Statement made by Mr Amadou Sy, who was heading the International Monetary Fund, IMF in Seychelles. Mr Sy explained that all quantitative targets for 2018 have been met and that the programme seems to be on track for 2019, "we have started making forecasts and so far the programme seems to be on track".
IMF has just completed its third Review under the Policy Coodination Instrument Arrangement with Seychelles and Mr Sy, was speaking at a Press Conference at the Central Bank, which was attended by the Secretary of State for Finance, Trade, Investment and Economic Planning, Patrick Payet, Central bank Governor, Caroline Abel and other senior offices from the IMF, the Ministry of Finance and the CBS. The delegation was in Seychelles from March 6‒19 to meet with relevant partners conducting different discussions.
IMF will be back six months time to look at the performance of the programme, but he noted that they are expecting the programme to be on track for 2019.
Mr Sy noted that the delegation have had a frank and transparent discussion with the Ministry of Finance, and that they also discussed permanent fiscal measures in 2020 that would help secure the medium-term debt reduction target. It also stressed that delays in the implementation of Air Seychelles’ restructuring plan could undermine government’s efforts to sustain strong fiscal primary surpluses and jeopardize medium-term public debt reduction goals.
And Mr Patrick Payet, replacing the Finance Minister, pointed out that definitely, the Ministry will look at the budget and see how best to structure the major infrastructures, such as the Air Seychelles restructuring plans, and the impacts of these infrastructures. "we need to assess and ascertain these policy recommendations, how we can structure everything in such a way in the 2020 budget and ensure as well that the fiscal policies that we are implementing currently, with all the stakeholders, will ensure that there is macro-economic stability in 2019,” he said.
The recommendation advises the Ministry and government to structure large infrastructural projects in such a way as to not create major shocks to the local economy.
And the Central Bank Governor, Caroline Abel has said that they are constantly working with the IMF especially on technical and policy issue and so far everything is on track. But noted that the tight monetary policy maintained byCBS since the second half of 2018 has ensured that the inflation rate is maintained which has resulted in the strong performance. Governor Abel pointed out that there is a need to increase awareness and education;"we want people to relook at how they generate their income, she says. If CBS sees a reduction in credits, people are more disciplined and conscious of their spendings and that things continue to go well, then we can review our monetary policy".
The IMF delegation have met with President Danny Faure, Minister for Finance, Trade Investment and Economic Planning Maurice Loustau-Lalanne, other officials from the ministry and related organisations during their visit here. Mr Sy noted that the mission appreciates the high quality of the discussions and thanks the authorities for their hospitality, as well as the open and constructive dialogue.