Seychelles is facing an unprecedented contraction in tourist flows in 2026: arrivals dropped 14% year-on-year by mid-June, while the Central Bank is holding its policy rate at 1.75%, seeking a delicate balance between supporting activity and controlling inflation.
A difficult first half for tourism
Figures from the Seychelles National Bureau of Statistics paint a stark picture. In the January–May 2026 period, visitor arrivals totalled 154,232 — down 11.7% compared to the same period in 2025 (165,155 arrivals). In May alone, 27,201 tourists visited the islands, down from 28,161 a year earlier (-3.4%). Day cruise tourism suffered an even sharper blow: cruise day passengers fell 43.8% in May (1,767 vs. 3,146 in May 2025).
Tourism revenue for January–May 2026 stood at $455 million, a 2.1% decline from the same period in 2025. Europe remains the top source market (106,142 visitors, 72.8% of total), ahead of Asia (15%) and Africa (7.2%).
The Gulf hub squeeze
The main driver of this decline is geopolitical disruption in the Middle East. Around 60% of international tourists connect through the Gulf hubs of Doha, Dubai and Abu Dhabi to reach Mahé. Regional tensions have driven up costs and disrupted these routes, mechanically reducing arrival flows. Compounding this are rising maritime freight and energy costs — Seychelles imports 95% of its energy — which are pushing up prices and weighing on visitor spending power.
The Central Bank holding the line
Against this backdrop, the Monetary Policy Committee of the Central Bank of Seychelles decided, in late June 2026, to hold the policy rate at 1.75% for Q3. The deposit facility rate remains at 0.25% and the credit facility rate at 3.25%. The required reserve ratio is maintained at 10% of rupee deposits. Authorities justified the decision by citing «a high level of uncertainty» linked to international developments, with the Seychellois rupee continuing to depreciate despite adequate foreign exchange supply.
Why it matters
With the IMF revising its 2026 growth forecast to 1.5% (down from an estimated 5.1% in 2025), Seychelles — Africa's richest island economy by GDP per capita — is navigating its most turbulent period since the pandemic. Its structural dependence on tourism and Gulf air routes is a vulnerability that authorities cannot resolve in the short term. For investors and operators across the Indian Ocean, this shock is a stark reminder of the urgency of diversifying revenue sources and source markets.
Sources: Seychelles National Bureau of Statistics, Africa24 TV, Radical Leap Group, IMF