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The Republic of Seychelles lies northeast of Madagascar, an archipelago of 115 islands with almost 98,000 citizens, three-quarters of whom live on the main island of Mahé. Seychelles has the highest gross domestic product (GDP) per capita in Africa, at $13,306 (2021). It is highly dependent on tourism and fisheries, with climate change posing risks to the sustainability of its economy long-term.
Seychelles is the most prosperous nation in Sub-Saharan Africa. Its economy is highly dependent on tourism, making it vulnerable to global developments. Investor interests in the blue economy sector is growing. Fisheries remain the largest sector after tourism.
In the medium term, tourism will continue to be the key growth driver, complemented by growth in private consumption. Average annual inflation has moderated, in line with an appreciation of the Seychelles rupee (as tourism has recovered). However, the fallout from the war in Ukraine will continue to put upward pressure on food and fuel prices and inflation into 2023. The fiscal deficit is expected to decline by 2.2 percentage points to reach 3.8% by end-2022.
Growth is expected to peak at 10.9% in 2022 and average 5% in the medium-term as tourism recovers, the pandemic recedes, and global economic growth and trade resumes. The war in Ukraine reduced tourist arrivals from Russia and Ukraine but an increase in arrivals from Western Europe has muted the impact. The economy has continued to recover in 2022, driven by a rebound in tourism and the services sector. In the first half of 2022, tourist arrivals were at about 70% of the 2019 level (in contrast to the 60% decline in 2020). Higher tourism activity has helped with an appreciation of the Seychelles rupee, and the stabilization of inflation, partly offsetting the upward pressure on prices from the war. The Government has scaled-up social protection to mitigate the impact of higher-than-expected inflation on poor households.
Source: World Bank, Seychelles Country Overview
Access the Seychelles SDG Investor Map prospectus and summary report here and here.
