Seychelles: Economic Outline

Economic Indicators

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The Republic of Seychelles is an archipelago of 115 islands, with three-quarters of the population living on the main island of Mahé. The country’s recent economic performance has been strong, benefiting from the continued growth of the tourism and fisheries sectors, which directly accounts for more than one-fourth of GDP. However, the effects of the COVID-19 pandemic on the tourism sector impacted the archipelago’s economy, with a contraction of 12.9% in 2020. GDP rebounded partially in 2021, with an estimated growth of 6.9% (IMF) thanks to a faster than expected increase in tourism arrivals since the country reopened its borders in March 2021. The IMF expects GDP to grow 7.7% this year and 6.8% in 2023.

Seychelles runs large, structural current account deficits, financed substantially by foreign direct investment. The deficit stood at 18.4% of GDP in 2020; however, a rebound in economic activity in 2021 and resulting revenue growth (+9.1%) contributed to a deficit reduction (9.4% - Fitch Ratings), with an average deficit forecasted at 4.4% in 2022-23. The depreciation of the Seychellois rupee has contributed to the increase in general government debt, half of which is denominated in foreign currencies: after skyrocketing at 96.5% in 2020, the debt-to-GDP ratio decreased to 81.9% in 2021 and is expected to follow a downward trend over the forecast horizon (82.8% and 79.3% in 2022 and 2023, respectively - IMF). In the same period, grants should account for a cumulative 7% of GDP. In 2021, the government took over distressed national carrier Air Seychelles' liabilities to Etihad of USD 11.4 million, and the successful execution of a Liability Management Operation in July 2021 led to the conversion of SCR 1.2 billion (4.8% of GDP) in short-term debt to three-, five- and seven-year Treasury bonds. Inflation picked up to 10% in 2021 but should decrease to 3.7% this year and 3.1% in 2023.
 Since introducing the Seychelles International Business Companies Act in 1994, over 200,000 companies have been registered and new offshore companies continue to register each month. Seychelles is at the forefront of the "blue economy" movement focused on using oceans for economic growth, improved livelihoods and jobs while maintaining the ocean's ecosystem. Since 2012, more intense structural reforms have been implemented, focusing on fiscal reform, the restructuring of state companies and financial system regulations.

Seychelles has the highest per capita GDP in Africa, is classified as an upper-middle income country and currently has the highest literacy rate and the best healthcare system in the East Africa region. As per the National Bureau of Statistics, in Q4/2021 the average number of employed persons for all sectors was 50,003 and average earnings were SCR 15,020. This represents a decrease of 2% and of 3.4% respectively compared to the same quarter in 2020. According to World Bank data, the poverty rate is very low (2.5%), but a 2020 study by the National Bureau of Statistics found that 12% of the population is multi-dimensionally poor and experiencing deprivation related to the standard of living, education, health and employment. Given the limitations on land, labour and the fragile environment, economic growth will have to rely on increases in productivity in the medium term.

Monetary Indicators	2016	2017	2018	2019	2020
Seychelles Rupee (SCR) - Average Annual Exchange Rate For 1 MUR	0.37	0.40	0.41	0.39	0.45

Source: World Bank - Latest available data.

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Latest Update: February 2023