Despite a rise in the amount of money earned in recent months, the Seychelles’ economy remains fragile, according to the governor of the Central Bank of Seychelles (CBS).
Caroline Abel said at a press conference that CBS is tracking many measures that indicate 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.
The island nation has seen a small rise in revenues from the CBS’ last report on April 27 to Friday, May 14. This compares to the same time last year. This, according to Abel, is due to a small uptick in the tourism industry.
Since March 25, when Seychelles, a group of 115 islands in the western Indian Ocean, reopened its borders to commercial passenger flights, the sector has seen over 24,000 tourist arrivals.
Seychelles received $17.2 million from the beginning of the month until Monday, May 17. This figure was $14 million in the same timeframe last year. Seychelles collected $26.5 million in the same period last year.
Abel clarified that the year 2019 is used as a benchmark since it was before the COVID-19 pandemic began to affect Seychelles’ economy.
“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 clarified that the economic reality has changed dramatically in the last two years, 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 added.
According to CBS, there has been more money going out than coming in the foreign exchange market since the beginning of May.
Able also stated “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,”.