Inflation resumes downward trend |08 May 2013

During the last six months of 2012 the figures had dropped to 5.8% from 6.2% representing an overall drop of only 0.4% making the current 1.2% decline announced Monday by the National Bureau of Statistics much more significant.

During the month of April fish prices fell 0.5% on a month-on-month basis owing to better supply in the market due to calmer seas, while transport costs decreased 0.9% as a result of lower prices of petroleum products at the pump.

The cost of the US dollar which yesterday stood at around R12 is also seen as having contributed to the drop in inflation.
Most other costs went up during April though. Vegetables rose 1.9% and fruits increased 1.5%. The cost of non-food items inched up by 0.1%.

During his Budget Address 2013 Finance, Trade and Investment Minister Pierre Laporte said Seychelles’ biggest economic challenge today is inflation which is largely impacted by development in international markets, talking of world prices of basic commodities and petroleum products.
 
“This was exacerbated by the temporary depreciation of the Seychelles rupee in the first seven months of 2012 which caused inflation to rise to over 9%.

However, owing to a tighter monetary policy by the Central Bank of Seychelles it has since gradually declined to 7.6% by end-October,” he said in December.

“Other economic indicators affirm that our economy remains strong and resilient. The Seychelles rupee has stabilised against major world currencies following the earlier depreciation. Our primary fiscal surplus is projected to exceed the targeted level while public debt has fallen to 80% of gross domestic product compared to over 150% of GDP in 2008.

He said in 2012 the Seychelles economy realised positive growth despite the effects of the financial meltdown that were being felt in many parts of the world.

“The impact of rising food and fuel prices internationally were felt by us all as domestic inflation soared to its highest level in four years. However, through it all we have been resilient as the fundamentals of our economy remains robust.”

He said a stable macro-economy supported by strong monetary and fiscal discipline have been supporting the positive growth.

“Nevertheless, we have ensured that people remain at the heart of our growth strategy through continued investment in their socio-economic needs.
       
“Our private sector must remain dynamic because it is the engine of growth. This is why our government is constantly exploring avenues to make the investment climate more conducive for the private sector to thrive. In 2012, we invested significant time and resources to ensure that it is easier, less costly, and less bureaucratic for anyone aspiring to do business in Seychelles.
 
“When I took office in March 2012 I made a firm commitment to build on the work started by my predecessor, Vice President Danny Faure, to revamp and modernise the business environment in Seychelles.

“We both agreed that Seychelles did not belong in the ‘above 100’ club of the World Bank’s Ease of Doing business ranking and that we could do better. With this shared vision we established an action plan, which we have implemented with vigour and determination, with the support of key stakeholders including our international partners and the private sector. Those efforts paid off as Seychelles climbed 29 places in the World Bank ranking – a significant improvement in one year by any standard,” he said.