Seychelles: Third Reviews Under the Arrangement Under the Extended Fund Facility and the Arrangement Under the Resilience and Sustainability Facility and Request for Rephasing of Access Under the Resilience and Sustainability Facility-Press Release; S

Economic growth in Seychelles appears to have slowed relative to earlier forecasts. Real GDP growth is projected at 3 percent in 2024 compared to an earlier projection of 3.7 percent. This reflects lower tourist arrivals in the wake of a temporary reduction in the number of direct flights and a decline in average spending per tourist. Some recovery is expected in the last quarter of 2024, but such a rebound is not expected to offset the shortfall recorded during the 2nd and 3rd quarters. Year-on-year inflation was about 0.6 percent as of September, reflecting stable utility rates and stable or declining prices for fuel and other commodities. Fiscal performance in the first half of 2024 was tighter than budgeted, driven by robust tax collection. Despite the slowdown in tourism, the external balance of payments is expected to strengthen in 2024 as the larger current account deficit is more than compensated for by larger financial inflows.