Seychelles: Fourth Reviews Under the Arrangement Under the Extended Fund Facility and the Arrangement Under the Resilience and Sustainability, Request for Modification of Performance Criteria, and Request for Modification of Reform Measures Under the

This paper discusses Seychelles’ Fourth Review under the Arrangement under the Extended Fund Facility (EFF) and the Arrangement under the Resilience and Sustainability Facility, Request for Modification of Performance Criteria, and Request for Modification of Reform Measures under the Resilience and Sustainability Facility. Completion of the reviews allows for an immediate disbursement of about US$13.7 million intended to strengthen macroeconomic stability, sustain growth, and reinforce fiscal and monetary policy frameworks, while also supporting efforts to strengthen resilience to climate change, exploit synergies with other sources of official financing, and catalyze financing for climate-related investments. Economic growth for Seychelles in 2024 is estimated at 2.9 percent, reflecting lower dynamism in the tourism sector. Inflation remained subdued and fiscal performance was tighter than budgeted, driven mainly by underspending on capital expenditure. For 2025, economic growth is projected at 3.2 percent, reflecting slower growth projected for Europe—Seychelles' most important tourism source market. Performance under the EFF has been strong with all quantitative targets and structural benchmarks for end-December 2024 met. However, two structural benchmarks scheduled for 2025 have encountered minor delays due to capacity constraints. Progress has been satisfactory under the RSF implementation, and the authorities remain committed to the programs’ objectives.