Seychelles Secures $45 Million IMF Support Package as Economic Growth Momentum Continues

Staff-level agreement reached following comprehensive mission review in Victoria

Seychelles has successfully concluded negotiations with the International Monetary Fund, securing a staff-level agreement that will unlock approximately $45 million in financial support once approved by the IMF Executive Board. The breakthrough follows an intensive two-week mission to Victoria from 4 to 19 March 2026, with final outcomes presented to Vice President Sebastien Pillay at State House.

Strong economic performance drives positive assessment

The IMF delegation, led by Mission Chief Todd Schneider, delivered an encouraging assessment of Seychelles’ economic trajectory. The country’s economy demonstrated robust performance throughout 2025, achieving an estimated growth rate of 5.1 percent, largely driven by strong tourist arrivals that continued the archipelago’s post-pandemic recovery.

Minister Pierre Laporte, IMF Resident Representative Farayi Gwenhamo, and Central Bank of Seychelles First Deputy Governor Brian Commettant participated in the discussions, which focused on concluding the mission, reviewing ongoing reforms, and assessing the country’s economic outlook.

Final reviews of dual IMF arrangements near completion

The negotiations centered on the final reviews of two significant IMF arrangements: the Extended Fund Facility and the Resilience and Sustainability Facility. With IMF staff and Seychellois authorities reaching agreement on the required policy framework, the Executive Board is expected to make a final decision in May 2026.

Upon approval, the latest tranche will bring total IMF support to approximately $105.1 million since the programmes began in May 2023, representing a substantial financial partnership aimed at maintaining macroeconomic stability and supporting sustainable development.

Impressive fiscal and monetary indicators in 2025

Seychelles’ economic fundamentals showed remarkable strength across multiple indicators during 2025. Inflation remained just below zero, demonstrating effective monetary policy management, while the government achieved a primary surplus of 2.5 percent of GDP. This fiscal discipline contributed to a meaningful reduction in public debt, which fell to 53.6 percent of GDP.

The tourism sector’s strong performance generated sufficient foreign exchange earnings to narrow the current account deficit to 6.5 percent of GDP while strengthening foreign exchange reserves to just over four months of import cover — a crucial buffer for economic stability.

Growth expected to moderate amid global headwinds

Looking ahead to 2026, the IMF projects a more challenging economic environment, with growth expected to slow to around 1.5 percent. Inflation is forecast to rise to 2.6 percent, driven by higher global prices for oil and food commodities, alongside increased shipping costs that continue to affect small island economies disproportionately.

The combination of lower anticipated tourism income and higher import costs is expected to widen the current account deficit, reduce foreign exchange reserves, and place pressure on government revenue streams, potentially leading to an increased fiscal deficit.

Outstanding reform areas require additional time

While most programme targets have been successfully met, two key reform areas will need extended timeframes for completion. These include establishing systems that enable banks to purchase government securities and completing comprehensive reviews of key government ministries, both now expected to be finalized by the end of 2026.

Progress on climate-related reforms has been notable, though some components remain ongoing as the country continues to strengthen its resilience against environmental challenges.

IMF emphasizes preparedness and flexibility

The Fund advised the government to prepare responsive measures for possible economic shifts, ensuring that any support remains targeted toward vulnerable groups and maintains a temporary character. The importance of maintaining exchange rate flexibility alongside continued structural reforms was also highlighted as essential for economic adaptability.

“The IMF remains committed to supporting Seychelles in maintaining macroeconomic stability in the face of new shocks,” Schneider confirmed, underscoring the institution’s ongoing partnership with the island nation as it navigates an increasingly complex global economic environment.