The IMF has given the Republic of Seychelles economy a clean bill of health on the back of rising tourism revenues and falling government debt, as the international body concluded its regular check-up of the island nation.
The fund revised its GDP growth forecasts for this year up to 3.5 per cent, from its previous projection of 3 per cent, as the island’s economy is lifted by growth in visitor numbers and the effect of lower fuel prices.
The IMF reiterated its support for the Seychelles target of reducing its debt-to-GDP ratio to below 50 per cent by 2018. Its debt is expected to stand at 63.7 per cent of GDP at the end of this year.
The nation is set to run current account deficits for the foreseeable future, but a slight fall in the value of the Seychelles rupee has meant that the current account deficit should fall from 20.5 per cent to 13.6 per cent by 2018. “Macroeconomic outcomes remain solid,” the IMF report said.
Abu Dhabi has long been a major investor in the Seychelles. Last week, Abu Dhabi Airports Company said that it was in talks with the country’s government to build a new airport on Mahé island, the largest of an archipelago of 135 islands that make up the Seychelles. In 2013, Masdar and the Abu Dhabi Fund for Development built an eight-turbine wind farm at the Port of Victoria, also on Mahé.
James Michel, the island’s president, credited the Etihad chief executive James Hogan with having “saved the country”, after Etihad bought a 40 per cent stake in Air Seychelles worth $45 million in 2012.
The airline reported a $3.2m profit last year, after a profitable year in 2013. It ran losses for the two years preceding Etihad’s stake purchase.
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