Press Release: Statement at the Conclusion of an Article IV Mission to Mauritius
IMF News, November 3, 2009
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- Press Release: Statement at the Conclusion of an Article IV Mission to Mauritius
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- Published: November 3, 2009
Mission overview
- An International Monetary Fund (IMF) mission headed by Atish Ghosh visited Mauritius during October 19-31, 2009 to conduct Article IV consultation with the authorities.
- The mission met with Prime Minister Dr. The Honorable Navinchandra Ramgoolam; Dr. The Honorable Vice Prime Minister and Minister of Finance an Empowerment Rama Sithanen; Governor of the Bank of Mauritius Rundheersing Bheenick; other senior government officials; and representatives of the private sector and civil society.
- Statement issued by Mr. Atish Ghosh, Mission Chief for Mauritius, in Port Louis on November 3, 2009.
Assessment of policy response to the global financial crisis
- The mission welcomed the prompt and comprehensive policy response, which included:
- fiscal stimulus;
- monetary loosening; and
- direct measures, developed in cooperation with the private sector, to help preserve jobs (such as the Mauritius Approach, Work and Training Scheme, and targeted/time bound tax relief).
- The mission judged that these measures have helped cushion the economy from the impact of the crisis and better positioned Mauritius to benefit from an upturn in the world economy.
Economic outlook and uncertainty
- The economic outlook for Mauritius is subject to an unusually high degree of uncertainty, mirroring the global economy.
- Initial positive indications were noted, including in the tourism and other export sectors.
- Growth next year is expected to be considerably stronger than in 2009.
Fiscal policy guidance
- The key policy challenge is to determine when to resume fiscal consolidation without jeopardizing the recovery by prematurely withdrawing stimulus.
- Policy recommendations:
- Hold some stimulus measures contingently in reserve and deploy them only if the recovery seems to be faltering; the announced stimulus package has in part this contingent feature.
- As the effects of the global crisis pass, resume efforts at fiscal consolidation.
- Implement an effective debt management strategy to help place public debt back on a downward path.
Monetary policy guidance
- The Monetary Policy Committee (MPC), established in 2007, was recognized as a major step in enhancing the monetary policy framework.
- The MPC appropriately lowered the key policy interest rate last year and earlier this year in the face of weakening activity.
- Pending further indications on economic prospects, the interest rate should be maintained at its current level, while remaining vigilant should inflationary pressures arise as the world economy recovers.
Structural reforms, competitiveness, and statistics
- The mission welcomed structural reforms in recent years that have contributed to raising Mauritius’s competitiveness.
- Recommendations to strengthen competitiveness and international standing:
- Maintain reform momentum.
- Enhance the quality, coverage, and timeliness of macroeconomic statistics to meet the IMF’s Special Data Dissemination Standard (SDDS).
- Strengthening these areas will further enhance Mauritius’s ability to compete with other emerging market and advanced economies, including as an important international financial center.
IMF support and next steps
- The IMF stands ready to continue to assist the authorities in the implementation of their economic program, including through the provision of technical assistance.
- The IMF looks forward to continued fruitful policy dialogue in the period ahead.
Press Release No. 09/385 — Statement at the Conclusion of an Article IV Mission to Mauritius (November 3, 2009).