Country Report Mauritius January 2009

Outlook for 2009-10

• The Alliance sociale (AS) coalition government will continue its policy of liberal economic reform, although its policies may become more populist in the run-up to the next general election, due in mid-2010.
• The fiscal deficit is forecast to widen to 5.1% of GDP in fiscal year 2008/09 (July-June), as revenue will be hit by slowing GDP growth and expenditure will be swollen by the government's measures to stimulate the economy.
• 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 9.7% in 2008, average inflation is forecast to fall to 4.7% 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 MRs32.97:US$1 in 2009 and MRs34.26:US$1 in 2010 as it comes under pressure as a result of the slowing of economic activity and the large current-account deficit.
• The current-account deficit is forecast to widen to 11.9% of GDP in 2009, owing to sharply lower revenue from tourism, and narrow to 11.6% of GDP in 2010 as the markets generally begin to recover.

Monthly review

• The main opposition party, Mouvement militant mauricien (MMM), has hinted that its MPs might resign en masse and provoke a mini-general election early in 2009. However, this is thought unlikely to happen.
• In support of the government's policy of stimulating the domestic economy, the Bank of Mauritius has cut the repo rate by 100 basis points to 6.75% and reduced the cash reserve ratio and is offering banks a US$125m line of credit.
• The government has announced a stimulus package amounting to US$330m of additional spending, intended to help Mauritius weather the global economic downturn and prepare it for the eventual upturn.
• The rate of GDP growth fell again in the third quarter of 2008, to 4.5%, and the Central Statistics Office estimates that GDP growth for the year as a whole will be 5.2%, compared with its previous forecast of 5.6%.
• Tourist arrivals in November 2008 were 2.4% lower than in November 2007a stark illustration of the effect of the world economic downturn on one of the pillars of the Mauritian economy.
• Provisional estimates from the Bank of Mauritius put the current-account deficit in the first three quarters of 2008 at MRs21bn (US$760m), two-and-a-half times the deficit in the same period of 2007.

Source: Country Report

This report covers the following industry codes:
SIC Code: 65;60;70
NAICS Code: 53;52;72

This report covers the following industry codes:
SIC Code: 65;60;70
NAICS Code: 53;52;72