Fitch Ratings, award-winning credit rating agency, has affirmed the Seychelles’ Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) at ‘B’ with a Stable Outlook. Seychelles therefore maintains the same rating received at the end of 2020. In 2020, the agency had already gauged Seychelles’ high level of public and external indebtedness as well as its vulnerability to economic shocks to be the reason for this rating.

The credit rating agency notes that Seychelles recorded an instant boost in the level of inbound travel following the reopening of its borders on March 25 – this represented 38% of the 2019 level. Fitch forecasts a gradual recovery of monthly tourist arrivals to 2019 levels by Q3 2022, with total arrivals in 2021 at 41% of the 2019 level.

Despite the Covid-19 pandemic having taken a toll on Seychelles’ fiscal consolidation and public debt reduction effort, the country is expected to bounce back. The Stable Outlook classification brings in expectations for the country to gradually lean towards recovery with tourism and economic growth in 2021 – indeed, Fitch Ratings forecasts real GDP to rebound to a 5% growth in 2021 compared to -12.8% in 2020, explained, amongst others, by increased tourism activity, expansionary fiscal and monetary policies combined with a successful vaccination campaign.

Access the full rating commentary by Fitch Ratings here