Seychelles 

Seychelles country policy

Policy established 09 June 1996

• The country ceiling is 30 mln euro
• Early warning signal 30 mln euro
• Private buyers: SIF facility, FX generating buyers only

Country class: 7

Seychelles country facts

Atradius DSB  Economic Research
Country Report last updated :  17 October 2008
Country :  SEYCHELLES

Political Situation
Stable; Discontent Among Opposition

Head of state
President James Michel (SPPF, since April 2004, next elections 2011).

Form of government
The government is formed by the Seychelles People’s Progressive Front, SPPF.

Internal Economic Situation
Decelerating Growth

General situation
Since 2006 positive growth. Seychelles’ infrastructure was hit by the tsunami in 2004 and the tourism sector is confronted with competition from emerging (cheaper) destinations in the region like Madagascar and Comoros. The fishing sector (tuna) has surpassed tourism as the most important sector. The outlook for tourism is rather bleak due to the global recession.  
Economy hurt by lack of foreign exchange: several airlines, including British Airways, have stopped offering direct flights to the Seychelles because of the difficulty of transferring Rupee earnings out of the country. Small banking sector (6 banks), which is heavily exposed to government debt. 
 
External Economic Situation
Poor Solvability; Critical Liquidity; DEFAULT ON SOVREIGN DEBT
Main sources of foreign exchange
Tourism, canned tuna (54% of goods exports), re-exports of petroleum (32%). 

Main foreign markets
EU (75%, UK 23%, Spain 23%, France 11%), Japan (10%).

Main expenses of foreign exchange
Food (25%), manufactured goods (23%), fuel (20%).

Balance of payments 
Tourist receipts are partially compensating the very high trade deficits but current account remains negative. Significant FDI inflows into tourism industry, on average US$ 54 mln annually over the period 2002-2007.