(Seychelles News Agency) – Fitch Ratings has affirmed Seychelles’ credit rating at BB- with positive outlook, which is supported by relatively high income levels, strong World Bank governance indicators and support from multilateral creditors.
According to the Ratings released on Friday, these strengths are balanced by the economy’s small size and high concentration in the tourism sector, heightening vulnerability to external shocks.
The Ratings state that Seychelles’ tourism sector, which directly accounts for up to 25 percent of its economy and 40 percent of current account receipts, has stagnated this year, with visitor arrival growth flat in the first eight months year-on-year. The authorities expect arrivals to reach 95 percent of 2019 levels by 2025, down from previous projections.
“This is due to weakness in some source economies, mainly in Western Europe, strong competition from other high-end tourist destinations, and inadequate growth of flight routes to Seychelles. Tourism receipts are set to decline 13 percent year-on-year in 2024, albeit to still higher than pre-pandemic levels, reflecting stagnant arrivals and a shift away from higher-spending tourists mainly from the Gulf countries and Russia, and grow only marginally in 2025,” said Fitch Ratings.
On economic growth, Fitch expects Gross Domestic Product (GDP) growth of 3 percent in 2024, and 4 percent in 2025, with some positive impact from the 2025 Beach Football World Cup and pre-presidential and parliamentary election spending. Potential growth is estimated at around 3.5 percent supported by a solid pipeline of investment in hotel projects of over $700 million due to come online in 2024-25. This will boost room capacity in the country by 6.4 percent.
Additionally, the Information Communication and Technology (ICT) sector has posted strong growth in recent years, but meaningful diversification prospects for the economy appear limited.
The post Seychelles maintains Fitch Rating’s BB -, with positive outlook appeared first on DailyNews.