Country Report Mauritius December 2008

Outlook for 2009-10

• The Alliance sociale (AS) coalition government will continue its policy of liberal economic reform, although as the general election approaches in mid-2010 its policies may become more populist.
• The fiscal deficit is forecast to widen to 4.8% of GDP in fiscal year 2008/09 (July-June), as revenue is unlikely to reach the level proposed in the budget owing to the slowing of GDP growth due to the global economic downturn.
• The Economist Intelligence Unit forecasts that real GDP growth will fall to 2.3% in 2009, owing to the effects of the world economic downturn, rising to 2.7% in 2010 as conditions begin to improve.
• After rising to an estimated 9.8% in 2008, average inflation is forecast to fall to 5.5% in 2009 and 5.4% in 2010 as world energy and food price inflation falls.
• The Mauritius rupee is forecast to depreciate to an average of MRs32.7:US$1 in 2009-10 as the US dollar rises on world markets.
• The current-account deficit is forecast to widen to 11.8% of GDP in 2009, owing to sharply lower revenue from tourism, and narrow to 11.5% of GDP in 2010 as the markets generally begin to recover.

Monthly review

• Charges of bribery during the 2005 general election against Ashock Jugnauth, a senior minister in the last government, have been upheld by the British Privy Council, and MrJugnauth's election has been declared null and void.
• The resulting by-election will split the opposition: the Mouvement militant mauricien will support Ashock Jugnauth, and the Mouvement socialiste militant will seek the return to parliament of its leader, Pravind Jugnauth.
• Pressure is growing on the governor of the Bank of Mauritius, Rundheersing Bheenick, as the bank's Monetary Policy Committee reverses his policy and supports the easing of monetary policy.
• Inflationary pressure appears to be easing as world fuel and food prices fall: year-on-year inflation fell from 9.7% in October to 8.3% in November; more price reductions are expected in the coming months.
• The slump in the tourist sector is hitting hotels hard, and a senior industry spokesman has warned that prospects for 2009 are alarming.
• The volume of goods passing through Port Louis reached record levels in 2007/08. Plans to expand the port have made progress, equipping Mauritius to benefit more from the eventual upturn in world trade.
• Although the trade deficit in the first nine months of 2008 was at a record level, data for the third quarter suggest that the deterioration is slowing.

Source: Country Report

This report covers the following industry codes:
SIC Code: 70;47
NAICS Code: 72;48