Seychelles' Fitch rating's BB - with positive outlook shows "continuing economic growth," says top official

Tamatave said this rating shows that Fitch Rating, as a credit rating agency, has become more optimistic about the future of Seychelles credit worthiness. (Gerard Larose)

Seychelles' new Fitch Rating of BB- with positive outlook shows the continuing economic growth of the island nation, said a top official of the Department of Finance on Wednesday.

The statement was made by the principal secretary for finance, Astride Tamatave, in a press conference, after the latest Fitch Ratings was released last Friday, upgrading Seychelles from a BB- with stable outlook to BB- with a positive outlook.

"This rating shows that Fitch Rating, as a credit rating agency, has become more optimistic about the future of Seychelles credit worthiness. This also shows that Seychelles' various fiscal and monetary policies adopted by the Central Bank and the government after the COVID-19 pandemic, to re-launch the economy, is working," said Tamatave.

She explained that in 2023, Seychelles attained a primary fiscal performance of 1.8 percent of GDP, with debt dropping to 60.1 percent of GDP.

The Ratings stated that tourist arrivals and tourism earnings increased by 5.7 percent and 5.8 percent respectively in 2023, reflecting a stabilisation after 82 percent and 59 percent increases in 2022.

Aside from tourism, Tamatave shared that the information and communication technology sector has contributed greatly to the economy in 2023, alongside fisheries by 2.5 percent.

The first deputy governor of the Central Bank of Seychelles, Brian Commettant, said this improvement to the Seychelles' Fitch Rating can also be attributed to the country's increase in foreign exchange. In 2023, there was an increase of 5.8 percent in foreign exchange entering Seychelles, an archipelago in the western Indian Ocean.

"This has also helped to support the country's reserves, which have increased from $639 million in 2022 to $682 million in 2023, which based on estimates, will be able to cover at least three months of importation," he added.

Despite the positive outlook from the Fitch Ratings, the report has noted that Seychelles remains susceptible to the impacts of climate change, with the island nation excessively vulnerable to the dangers posed by sea level rise, with effects already being noticed mostly through an increase in storm frequency and intensity that is rendering some coastal infrastructure useless.