Seychelles’ Central Bank says economy remains fragile
The Seychelles’ economy remains fragile, despite an increase in the amount of money received in the past months, the governor of the Central Bank of Seychelles (CBS) warned on Tuesday.
Caroline Abel told a press conference that there are several indicators that CBS is following that show that the economy is still fragile.
“We are seeing, for example, that the amount of money in savings deposits is going down. This is due to the fact that the price of commodities has gone up and people started taking money out of their personal reserves. If we are to start consuming as we were in 2019, we might be losing resources at a personal level. Without realising, we might lose all that we have. We need to be careful in the way we spend,” said Abel.
From the CBS’ last update on April 27 to Friday, May 14, the island nation has seen a slight increase in receipts as compared to the same period last year. Abel credits this to a slight improvement in the tourism industry.
The sector has seen the arrival of over 24,000 visitors since March 25, when Seychelles, a group of 115 islands in the western Indian Ocean, reopened its borders to commercial passenger flights.
From the start of this month until Monday, May 17, Seychelles took in $17.2 million. For the same period last year, this amount stood at $14 million. For the same period in 2019, Seychelles had earned $26.5 million.
Abel explained that 2019 is used as a point of reference, as this was a time before the COVID-19 pandemic started impacting the economy of Seychelles.
“What is worrying us the most at the moment is the increase in demand. Up until Friday, May 14, the demand for the month has been $23.2 million compared to the same time last year where the demand was $14.9 million. What we have observed is that the demand for May 2021 is more than that of May 2019 when the economy was performing well. From May 2019 until May 14, we had a demand of $21.4 million,” said Abel.
She explained that the economic reality of these two years is totally different and that “May 2021 is a time where the economy is still fragile, even if we have seen an improvement.”
“This shows us that we are looking at things the same way in 2021 as we did in 2019, however, the economic realities are totally different. It is our actions that determine what happens on the market,” she continued.
Within the foreign exchange market, CBS observed that since the start of May there is more money going out than what is coming in.
“There is less receipt being sold compared to what is being bought. It shows us that this year, until May 14, we have a demand that has increased by 55.4 percent and a receipt that has gone up by 23.2 percent. By the end of April this year, receipt had gone up by 129.3 percent and the demand had increased by 50.5 percent,” said Abel.