The economy expanded by 5.8% in 2025, but reduced visitor numbers between March and June weakened growth during 2026. “The effects of the Middle East conflict have been visible in a reduction in tourist arrivals, particularly during March-June,” IMF Mission Chief Todd Schneider said.
“Subsequent months have seen a nascent recovery in arrivals, but real GDP growth for 2026 is projected at 1%.”
An IMF team led by Schneider visited Victoria from September 21 to September 30 to conduct Seychelles’ Post-Financing Assessment.
A Post-Financing Assessment reviews the policies and economic outlook of a country with substantial outstanding IMF credit but without an IMF-supported or staff-monitored programme.
The assessment also considers Seychelles’ medium-term economic viability and capacity to repay the IMF.
Annual inflation remained moderate at 0.9% through August despite rising international commodity prices.
State-owned enterprises absorbed part of the increase through subsidies intended to limit the effect on domestic consumers.
However, the cost weakened the balance sheets of some state-owned enterprises and reduced dividend payments to the government budget. “Headline inflation remained moderate at 0.9% through August, reflecting a subsidy through state-owned enterprises to limit the pass-through of rising international commodity prices to domestic markets,” Schneider said.
“The cost of these subsidies has deteriorated some state-owned enterprise balance sheets and reduced dividend payments to the government budget.”
Seychelles’ external position remained broadly stable despite the economic shock.
The Seychelles rupee was broadly stable against the US Dollar, while central bank foreign-exchange reserves remained equivalent to about four months of imports.
The IMF said the effect on the financial sector also appeared limited. “The external sector has remained broadly stable despite the recent shock,” Schneider said.
“The Rupee has been broadly stable vis-à-vis the US Dollar, and central bank foreign-exchange reserves remain at about four months of import cover.”
The IMF Executive Board is expected to consider Seychelles’ Post-Financing Assessment in December 2026.
–IMF/ChannelAfrica–
