VICTORIA: The International Monetary fund has revised down its growth forecast for the Seychelles' economy in 2012 to 4 percent from 4.7 percent, citing a slowdown in tourism due to the euro zone debt crisis.
Gross domestic product for the Indian Ocean archipelago, which depends on tourism and fishing, is expected to have grown 5 percent in 2011 after expanding 6.7 percent in 2010.
"Growth in the tourism sector is expected to moderate in reaction to the unfolding sovereign debt and banking crisis in Europe," the IMF said in a statement seen by Reuters on Tuesday.
" the real growth of tourism is expected to slow from 6 percent in 2011 to 5 percent in 2012 and beyond. Respectively, 2012 GDP growth projections have been revised from 4.7 percent to 4 percent," it said.
The IMF said it also expected inflationary pressures to dampen in 2012 due to falling world commodity prices, which along with foreign direct investment-related imports should narrow the current account deficit this year.
"Annual inflation is expected to decline to about 3.5 percent," it said.
The consumer price index in Seychelles rose 0.4 percent in January from a month earlier, pushing the year-on-year inflation rate to 5.6 percent, the highest since October 2009.
The Washington-based body said Seychelles had maintained macroeconomic stability despite external shocks, and said the archipelago's debt restructuring was close to completion.
Seychelles undertook a raft of economic reforms to liberalise the once highly-controlled economy in late 2008 after it defaulted on a eurobond interest payment in the grip of an acute balance of payments crisis.
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