Country Report Mauritius November 2008

Summary

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 Economist Intelligence Unit forecasts real GDP growth of 4.2% in 2009 and 5.3% in 2010, driven by construction activity and growth in the services and seafood sectors, although constrained by the global economic downturn.
After rising to an estimated 10% in 2008, average inflation is forecast to fall to 6.8% in 2009 and 5.8% in 2010 as world energy and food price inflation falls.
The Mauritius rupee is forecast to depreciate to an average of MRs32.8:US$1 in 2009-10 as the US dollar rises on world markets.
The current-account deficit is forecast to narrow to 9.7% of GDP in 2009 and 9.1% of GDP in 2010 as the trade deficit/GDP ratio improves, compared with an estimated 10.8% of GDP in 2008.

According to a recent opinion poll, an alliance between the two main opposition parties, Mouvement militant mauricien and Mouvement militant socialiste, would defeat the AS coalition if an election were held now.
Following a ruling by the UK Supreme Court that the British government's refusal to allow exiled Chagossians to return home is legal, Mauritius may take the case to the International Court of Justice.
For the second year running, Mauritius was ranked the best-governed country in Sub-Saharan Africa in the Ibrahim Index of African Governance.
The government has forced a reduction in fuel prices in an attempt to control inflation, and in interest rates to boost the domestic economy.
This direct intervention is a defeat for the governor of the Bank of Mauritius, who had favoured higher interest rates.
The year-on-year increase in tourist arrivals slumped to just 0.1% in September as the global economic slowdown took its toll on high-value tourism.
The sharp decline of growth in tourism threatens the government's long-term plans for the sector and could damage the health of the economy as a whole.
It is now estimated that sugar production will grow by 5.3% in 2008, having contracted by 13.4% in 2007; but output is well below the level assumed in the government's recovery plans for the sector.

Source: Country Report

This report covers the following industry codes:
SIC Code: 70;1
NAICS Code: 72;11