perspectives

• Source: AFRICAN DEVELOPMENT BANK – African Economic Outlook (APE) 2019

Macroeconomic performance

The economy continues to grow, with real GDP estimated at 4.1% in 2018, compared to 3.8% in 2017. Growth was mainly driven by the construction and finance sectors, and information and communication technologies.

The fiscal deficit has widened slightly from 3.4% of GDP in 2017 to an estimated 3.5% in 2018, but is expected to fall to 3.4% in 2019 due to fiscal consolidation. and the ongoing granting of a grant by India. The sustainability of the public debt is considered broadly positive, although fiscal consolidation will be necessary for the country to reach its recently adjusted target of reducing its regulatory public debt to 60% of GDP by December 2021 .

Monetary policy was favorable in view of the low inflation environment and the need to support domestic activity. Inflation has increased from 3.7% in 2017 to an estimated 5.1% in 2018, largely due to food shortages caused by high rainfall losses. The current account deficit widened further, from 6.6 percent of GDP in 2017 to an estimated 8.8 percent in 2018. Gross international reserves stood at 11 months of imports. The main products exported are clothing, sugar cane, processed fish and cut flowers. The export of services continues to intensify, led by the tourism and finance sectors.

Outlook: Positive and Negative Factors

The economic outlook is positive thanks to favorable external conditions and increased public investment. The real GDP growth rate is expected to reach 4.0 percent in 2019 and 3.9 percent in 2020. Growth can even accelerate if the public infrastructure development program gains momentum and stimulates private investment. The current account deficit is expected to remain high, at 8.2% of GDP in 2019, given rising commodity prices and significant imports for the infrastructure development program. External financing of the economy should benefit from the continued strengthening of services exports – especially tourism. The main sectoral catalysts for growth should continue to perform well; in fact, financial services, food processing, retail and wholesale, information and communication technologies are expected to grow by more than 5%. In addition, the economy is diversifying through the use of high value-added sectors such as medical tourism and higher education.

Potential barriers due to rising global energy and food prices are expected to exert inflationary pressure and undermine the external position of the island’s economy. A slowdown in the economy of the main European trading partners (caused by international trade frictions or Brexit) can jeopardize tourism as well as the export of products. Other potential impediments to growth include limited local skills and natural hazards related to climate change.

The country is rapidly becoming a hub for trade, re-export, logistics and distribution; it is positioned as a springboard for national and international companies looking for opportunities on the continent. Mauritius is also becoming a platform or financial gateway to Africa. In 2016, banks and insurance companies based in Mauritius injected more than $ 50 million into the Kenyan economy through acquisitions and investments. In addition, Mauritian expertise is also rehabilitating and managing the sugar industry in Côte d’Ivoire, Madagascar, Mozambique, Tanzania and Uganda.

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Sunset Boulevard, Grand Baie
Mauritius
+230 5856 9160

© 2019 Conçu par Ebox

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