Economic Outline

flag Seychelles 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.

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 1.58e1.14e1.291.751.94
GDP (Constant Prices, Annual % Change) 1.9e-12.96.97.76.8
GDP per Capita (USD) 16,389e11,702e13,14017,70619,463
General Government Gross Debt (in % of GDP) 57.796.581.982.879.3
Inflation Rate (%) 1.81.2e10.03.73.2
Current Account (billions USD) -0.26-0.34-0.37-0.42-0.39
Current Account (in % of GDP) -16.1-29.5e-28.9-24.1-20.3

Source: IMF – World Economic Outlook Database - October 2021.

Note: (e) Estimated Data


 
Monetary Indicators 20162017201820192020
Seychelles Rupee (SCR) - Average Annual Exchange Rate For 1 MUR 0.370.400.410.390.45

Source: World Bank - Latest available data.

 

Main Sectors of Industry

Agriculture represented 2.5% of GDP in 2017. Products included coconuts, cinnamon, vanilla, sweet potatoes, cassava (manioc, tapioca), copra, bananas, and tuna.

Industry accounted for 13.8% of GDP in 2017. Industries included fishing, tourism, and beverages.

Services provided the remaining 83.7% of GDP in 2017.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Value Added (in % of GDP) 2.5 13.1 68.1
Value Added (Annual % Change) -0.7 -1.5 -14.9

Source: World Bank - Latest available data.

 
Socio-Demographic Indicators 20212022 (e)2023 (e)
Unemployment Rate (%) 3.03.03.0

Source: IMF – World Economic Outlook Database - Latest available data

 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
66,3/100
World Rank:
60
Regional Rank:
4

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 
 

Country Risk

See the country risk analysis provided by Coface.

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Partly Free
Political Freedom:
3/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
52/180

Source: World Press Freedom Index, Reporters Without Borders

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Sources of General Economic Information

Main Online Newspapers and Portals
News Seychelles
Seychelles News Agency
Seychelles Newspapers and News Sites
Useful Resources
Ministry of Finance, Trade Investment and Economic Planning
Ministry of Foreign Affairs
Central Bank of Seychelles
 
 

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Latest Update: May 2022