Seychelles Economic Outlook
- The Seychelles economy suffered a downturn in 2014 because of the poor performance of the tourism and manufacturing sectors and growth is projected to remain moderate in 2015/16.
- Increased public investment, improving conditions in the financial market and the private sector should continue to support the current economic and social reform agenda.
- Issues of spatial exclusion are not prevalent in Seychelles, given its small population which largely inhabits the main island of Mahe.
In 2014, the Seychelles economy is estimated to have grown by 3.8%, down from 6.6% in 2013. Tourism, the main driver of growth, was adversely affected by weak demand in countries of origin, notably Europe. Manufacturing production also slowed, and plant modernisation was undertaken in the main beverage sector. On the demand side, private consumption remained strong, partly driven by an increase in consumer credit. Growth is projected to remain moderate at between 3.5-4% in 2015 and 2016. Financial services and information and communications technology (ICT) are expected to continue to grow and provide opportunities for economic diversification. To keep at bay inflationary pressures that had increased in the first half of 2014 the government tightened monetary policy during the latter half of 2014. Inflation accordingly remained contained and within the target of less than 4% per annum.
The government approved a medium-term national development strategy (NDS, 2015-2019) in November which has four key areas: governance, economic development, social development and the environment.
Being a small middle-income island country, Seychelles does not have spatial exclusion issues similar to those of other African countries. Around 90% of the 90 000 inhabitants live on Mahe, one of the three main islands. However, with its limited land space and high population density, the country has a delicate balance to observe in addressing land use, conservation and economic development. The country has begun to design policies and plans to address these issues holistically.