Boosting economic performance

Seychelles’ BB- credit rating with a positive outlook signals a bright economic future, according to a senior government official, who pointed to solid macroeconomic indicators as key drivers of this progress.

Secretary of State for Finance, Patrick Payet, highlighted these positive signs during a presentation responding to Fitch Ratings’ assessment. He noted that Seychelles’ relatively high-income levels, strong governance as indicated by the World Bank, and support from multilateral creditors contribute to the favorable outlook. Fitch’s assessment also acknowledges that Seychelles is performing well in line with the benchmarks set by the IMF’s Extended Credit Facility (ECF) and the Resilience and Sustainability Facility (RSF). These programs, totaling 102 million USD, represent 4.7 % of the country’s 2023 GDP and are scheduled to be disbursed over three years, up to 2026. To date, 32% of these funds have already been utilized.

In response to the Fitch report, Payet stated, « We have a clear plan as a government and as a nation, supported by fiscal policies that aim to reduce our debt by nearly 50 % by 2029 ». He further emphasized that the government targets a primary surplus of 1.1 % of GDP by 2024. The positive credit rating is expected to aid both the government and private sector in securing favorable international loans.

Credit rating agencies are critical in providing lenders with insights into a country’s economic situation, helping them gauge borrowing risks and set loan terms. Seychelles, however, remain vulnerable to the impacts of climate change, with rising sea levels and more frequent storms threatening the country’s coastal infrastructure and economy.