The economic activity of Reunion Island was penalized by the effects of the crisis in the Middle East in the 2nd quarter, according to the economic analysis of the Institute of Issue of Overseas Departments (Iédom).
After two consecutive quarters of increase, the business climate indicator decreased by 3,6 points to 100,1 – its long-term level. The sharp rise in fuel prices has caused inflation to pick up and led a majority of companies to increase their selling prices..
Traders note a drop in attendance, to be linked to the rise in fuel prices. The increase in the basket amount, particularly in large-scale food distribution, would not have completely compensated for this lower attendance. After three quarters of decline in the number of job seekers, the job market is getting tougher.
For the third consecutive quarter, the number of business failures has increased. Cumulative over the last 12 months, 1,236 of them were placed in receivership or liquidation at the end of June – a number higher than the peak reached at the end of 2024. Year-on-year, insolvencies increase by 17%. “These difficulties are reflected in the evolution of management balances (charges, cash, and payment deadlines) which are deteriorating, notes Iédom. Outstanding operating credits taken out by companies are down by 2,2% quarterly variation, and -6,7% year-on-year.
