IMF con­cludes EFF Re­view Mis­sion to Sey­chelles

The Pak Banker - - Front Page -

WASH­ING­TON

An In­ter­na­tional Mone­tary Fund (IMF) mis­sion led by Carol Baker vis­ited Vic­to­ria from Oc­to­ber 17-26, 2012 to as­sess per­for­mance at end-June for the sixth pro­gram re­view un­der the Ex­tended Fund Fa­cil­ity (EFF) Ar­range­ment with Sey­chelles and dis­cuss the au­thor­i­ties' re­quest for a one-year ex­ten­sion of the three-year ar­range­ment and aug­men­ta­tion of ac­cess.

The mis­sion met with Pres­i­dent James Michel, Vice Pres­i­dent Danny Faure, Fi­nance Min­is­ter Pierre Laporte, Cen­tral Bank Gover­nor Caro­line Abel, and other se­nior gov­ern­ment of­fi­cials and rep­re­sen­ta­tives of the pri­vate sec­tor. At the con­clu­sion of the mis­sion, Ms. Baker is­sued the fol­low­ing state­ment: "The Sey­chel­lois econ­omy has shown re­silience in the face of the dif­fi­cult global en­vi­ron­ment. Eco­nomic growth has held up thanks to in­creas­ing tourist ar­rivals from non-tra­di­tional mar­kets; fis­cal poli­cies have re­mained firmly on track to­ward the gov­ern­ment's tar­get of bring­ing pub­lic debt down to 50 per­cent of gross do­mes­tic prod­uct (GDP) by 2018; and debt re­struc­tur­ing is nearly com­plete. Mone­tary tight­en­ing has been suc­cess­ful in re­vers­ing the mid-year in­fla­tion­ary uptick, and in­fla­tion pres­sures are expected to continue their re­cently ob­served down­ward path.

The gov­ern­ment has made sus­tained progress in im­ple­ment­ing the IMF-sup­ported pro­gram. All end-June 2012 quan­ti­ta­tive tar­gets un­der the pro­gram were met-some, in­clud­ing the fis­cal pri­mary bal­ance tar­get, by a wide mar­gin. The broader struc­tural re­form agenda is also mov­ing ahead, with im­ple­men­ta­tion of the elec­tronic clear­ing house and com­ple­tion of a study on util­ity tar­iff re­form.

The mis­sion wel­comes adoption of the value-added tax (VAT), and notes that de­layed im­ple­men­ta­tion to Jan­uary 1, 2013 does not ma­te­ri­ally af­fect the re­form agenda. "In light of these chal­lenges, the IMF mis­sion and the Sey­chelles au­thor­i­ties have reached an agree­ment, sub­ject to ap­proval by IMF man­age­ment and the Ex­ec­u­tive Board, on a one-year ex­ten­sion of the Ex­tended Ar­range­ment through De­cem­ber 2013 which in­cludes an aug­men­ta­tion of ac­cess of 60.6 per­cent of quota ($10.23 mil­lion), bring­ing to­tal ac­cess un­der the EFF-sup­ported ar­range­ment to 242.3 per­cent of Sey­chelles' quota in the IMF.

Specif­i­cally, the au­thor­i­ties and the mis­sion reached un­der­stand­ings, ad ref­er­en­dum, on eco­nomic poli­cies and re­forms to lock in the gains to date, make fur­ther in­roads on key re­forms and build pol­icy buf­fers in the un­cer­tain global en­vi­ron­ment.

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