Economic outlook for 2015 |17 December 2014

Tourism set to recover

While uncertainty has dampened domestic growth expectations next year, the tourism sector is expected to recover as a result of increased marketing and continued diversification.

Finance, Trade and Investment Minister Pierre Laporte made the remark while delivering his 2015 Budget Speech before the National Assembly on Monday.

Besides tourism, the recovery in other sectors, including manufacturing, that have been observed in the latter part of this year is expected to continue in 2015, added the minister.

Minister Laporte said the contribution to GDP of our ‘Blue Economy’ is set to increase with several initiatives, supported by the Government, but driven by private investment.

“Fish processing by local operators is set to increase beginning 2015 following completion of ten units for processing of demersal fish at Providence this year,” Minister Laporte said, adding that other small parcels of land have been released at the Providence fishing port to other local investors for fish processing.   

He recalled that government also this year approved several projects for processing of tuna and tuna-like species on Ile du Port primarily by Seychellois investors.

“Moreover, Seychelles-based operators are increasing investment in new semi-industrial fishing vessels, with 10 new vessels already confirmed to become operational soon for which financing have been secured. This will add to the 15 currently operating,” Mr Laporte remarked.

Noting that Seychelles waters also hold potential for petroleum, Minister Laporte said the search for oil and gas in our waters continues and will soon be extended to our shared extended continental shelf.

He noted that there are currently three companies actively conducting exploratory works, covering a total area of 35,639 square kilometers.

“In total these three companies have invested US $57 million on their activities in Seychelles. One of them has budgeted an extra US $19 million for 2015 in preparation for its well drilling commitment. Government has received two more applications for an area totaling just of 20,000 square kilometres and negotiations with the applicants will begin shortly,” Minister Laporte said.

He said the expected acceleration of growth in the real economy will continue to be supported by prudent fiscal and monetary policies that aim for single digit inflation, improved external sector balance, and further reduction in public debt. In 2015 real GDP growth is projected at around 3 per cent with inflation expected to average around 5 percent.

The growth forecast for next year, Mr Laporte said, is slightly below our average projection of 3.4 percent over the next five years, which reflects the continuation of lethargic growth in global output which is expected to be at 3.8 per cent.