IMF raises Seychelles 2011 growth f’cast to 5 pct

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Seychelles’ economy is expected to grow by 5 percent in 2011 and by 4 percent next year as the global economy slows down, while inflation is likely to increase but remain in single digits by year-end, the International Monetary Fund said.

Gross domestic product for the Indian Ocean island archipelago, which depends on tourism and fishing, grew by 6.7 percent in 2010. The Fund’s new 2011 forecast is higher than its initial prediction of 4 percent.
“Real gross domestic product … is expected to gain another 5 percent this year, one percentage point more than under earlier projections,” the IMF said in a statement seen by Reuters on Friday, Reuters reports.
“Growth prospects in 2012 are positive despite the worsening of the global environment. Real GDP is projected to grow by 4 percent, as increasing supply of (hotel) accommodation is expected to mitigate the impact of the economic slowdown in Europe.”

It said inflation had risen in recent months, thanks to higher food and international oil prices, and was expected to climb further.

Consumer prices in Seychelles rose 0.4 percent in September from a month earlier, pushing the year-on-year inflation rate to 3.3 percent from 2.9 percent in August.
“As the pass-through continues, the year-end inflation should increase slightly but remain in low single digits,” the IMF said.

Seychelles undertook a series of economic reforms in late 2008 to liberalise its once highly-controlled economy after it defaulted on a Eurobond interest payment amid an acute balance of payments crisis.