(Seychelles News Agency) - The Seychelles’ tourism industry is performing better than the forecast made when the 2022 budget was finalised last year, said the finance minister on Wednesday.

Naadir Hassan made the conclusion during the review of the budget performance from January to February 2022 before the members of the National Assembly.

Last year, the National Assembly approved a budget of around SCR 10 billion which was expected to bring a fiscal deficit of $17.5 million (SCR 232.1 million) or 0.81 percent of the country’s gross domestic product (GDP).

“We had foreseen a gross domestic growth of 7.9 for the year 2022 but with new development in the tourism sector, our projection has been revised to reach 10.8 percent for the year 2022. Our indicators are showing that we can have an increase of 75 percent in tourism arrivals when we compare with the year 2021,” said Hassan.

The minister said that for the first six months of 2022, the revenue of the tourism sector has increased and reached $257 million compared to the last year which was $87 million for January to June.

Hassan said that Seychelles has also done well on its fiscal performance and that “we have reached a fiscal surplus of $44.9 million (SCR580 million) or 2.1 percent of the GDP compared to a deficit of $52.4 million (SCR 693 million) or 2.5 percent of the GDP that we had forecast for the end of June 2022. This means that we have collected more revenue than we had foreseen and we have spent less than we anticipated.”

While the tourism industry has bounced back after the COVID-19 pandemic, the Seychelles’ government still requires a supplementary budget to function.

Seychelles’ finance authorities have asked the parliament for a supplementary budget of SCR 472,807,402 ($35.5 million) which will be financed by a reduction in the spending in the budget of a sum SCR 887,451,324 ($67 million).

Hassan said one of the major expenses is that the government plans to use the additional funds for its debt repayment with Etihad Airlines.

Seychelles signed an agreement in 2021 with Etihad to the sum of $13 million to pay Air Seychelles’ debt in the midterm.

“Based on the negotiations with the administrators and creditors, the government has taken out a loan with the Trade Development Bank to repay this liability with Etihad which helps to remove the securities on the two twin otters,” explained Hassan.