IMF staff and the Seychelles authorities have reached a staff-level agreement on policies to complete the fifth and sixth reviews under the 36-month Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF), while also conducting discussions for the 2026 Article IV Consultation. The IMF Executive Board is tentatively scheduled to consider the reviews in May 2026.
Under the agreement, Seychelles is expected to receive a disbursement of up to SDR 32.9 million (about $45 million), bringing total disbursements under the two facilities to SDR 76.7 million (US$105.1 million) since May 2023.
The Seychelles economy posted robust results in 2025. Real GDP growth is estimated at 5.1 percent, buoyed by record tourist arrivals, while consumer price inflation remained slightly negative. The government recorded a primary fiscal surplus of 2.5 percent of GDP, helping to reduce public and publicly guaranteed debt to 53.6 percent of GDP. Tourism earnings contributed to shrinking the external current account deficit to 6.5 percent of GDP, supporting central bank foreign exchange reserves to cover just over four months of imports.
Performance under the EFF arrangement has been strong, with all quantitative targets for end-June 2025 met, and all but one for end-December achieved. Most structural reforms are completed or nearing completion, though some measures—including establishing a pilot retail-oriented window for government securities purchases and functional reviews of key ministries—require additional time and support from the World Bank.
Climate-related reforms under the RSF have progressed, particularly in managing and reporting financial sector climate risks. Remaining reforms include completing climate data gap analyses, publishing a climate risk exposure assessment for banks, and establishing cost-reflective end-use electricity tariffs, which are pending Cabinet review.
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Looking ahead, the IMF mission projects that Seychelles’ economy will face headwinds in 2026 due to disruptions from the ongoing Middle East conflict. Real GDP growth is expected to slow to about 1.5 percent, while consumer price inflation may rise to 2.6 percent due to higher international oil and food prices and rising freight costs. A decline in tourism revenues, combined with higher import prices, could widen the current account deficit to 7.8 percent of GDP and reduce central bank reserves modestly. Fiscal pressures may increase, highlighting the need for targeted, temporary expenditure measures and flexible exchange rate management.
The IMF mission emphasized the importance of continued structural reforms to enhance the business environment, promote economic diversification, inclusive growth, and strengthen resilience to climate shocks.
Todd Schneider, who led the mission, expressed gratitude for the authorities’ cooperation and reiterated the IMF’s commitment to supporting Seychelles in maintaining macroeconomic stability and advancing sustainable and inclusive growth.
This agreement positions Seychelles to conclude its EFF and RSF arrangements successfully, even as it navigates new external shocks affecting tourism and import costs.
