IMF Executive Board Concludes 2019 Article IV Consultation with Mauritius
IMF News, April 23, 2019
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- Published: April 23, 2019
Economic performance and labor market
- Real GDP expanded by 3.8 percent in 2017 and is estimated to have grown at a similar rate in 2018.
- Growth momentum expected to continue; Real GDP growth is projected at about 4 percent in the medium term.
- Inflationary pressures are contained.
- Unemployment rate has fallen to about 6.9 percent.
External sector, trade balance, and reserves
- External balance continues to deteriorate due to a rising trade deficit in goods, while the overall balance of payments remains in surplus.
- International reserves have improved significantly since 2016, supported by continued financial inflows.
- Directors agreed that the foreign exchange intervention policy should continue to build reserves buffers as conditions permit, to strengthen resilience to shocks.
Fiscal stance, public debt, and policy recommendations
- Fiscal stance is expansionary.
- Without fiscal consolidation, the authorities’ debt target of 60 percent of GDP by FY2020/21 is unlikely to be met.
- Public debt is projected to stay elevated over the forecast horizon and is susceptible to a range of macro-fiscal shocks.
- Directors underscored the need for fiscal adjustment to enhance fiscal credibility, preserve debt sustainability, and reduce the external imbalance.
- Directors urged a gradual fiscal consolidation beginning with the next budget for FY2019/20 to enhance fiscal credibility and to put public debt on a declining path.
- The authorities are considering extending the debt target by two years; Directors emphasized the need for significant policy adjustment if targets are to be met.
Monetary policy and financial stability
- Monetary policy remains accommodative; Directors agreed that the monetary policy stance is broadly appropriate at the current juncture.
- Directors encouraged authorities to continue efforts to contain excess liquidity in the banking system.
- Recommendation to modernize the monetary policy framework: build capacity to announce and track a medium‑term inflation objective to enhance policy credibility and improve resilience to shocks.
- A prudent stance by financial services firms and supervisory agencies has helped maintain financial stability.
- Directors stressed the importance of implementing outstanding FSAP recommendations for further strengthening financial stability.
Offshore sector, AML/CFT, and international tax initiatives
- Activity in the offshore global business sector has been broadly resilient while reforms to the sector are underway.
- Notable efforts pursued to meet international anti-tax avoidance initiatives and to strengthen the AML/CFT framework in line with FATF recommendations, though further reforms are needed to fully meet them.
- Directors underscored the need to expeditiously implement the remaining recommendations of the Eastern and Southern African Anti Money Laundering Group (ESAAMLG).
- As the revised tax treaty with India comes into effect, the global business sector is entering a transition phase; efforts underway to move into high-value added services and tap into other markets, notably in the region.
- Directors appreciated authorities’ efforts to bolster competitiveness by improving the business climate, building innovation capacity, reducing skill mismatch, and increasing female workforce participation.
Data, statistics, and institutional recommendations
- Directors encouraged the authorities to continue to improve data quality.
- Maintaining strong and independent institutions deemed essential to ensure the country remains an attractive investment and employment destination.
Projections, balances, and risks (select indicators and forecasts from Table 1)
- Real GDP per capita growth: 3.4 (2015), 3.7 (2016).
- GDP per capita (in U.S. dollars): 9,259 (2015); 9,681 (2016); 10,491 (2017); 11,281 (2018); 11,694 (2019); 12,433 (2020); 13,226 (2021); 14,097 (2022); 14,947 (2023); 15,835 (2024).
- GDP deflator: 1.0 (2015); 2.1 (2016); 1.4 (2017); 2.2 (2018); 2.6 (2019); 3.0 (2020); 2.9 (2021); 2.5 (2022); 2.4 (2023).
- Consumer prices (period average): 1.3 (2015); 3.2 (2016); 3.5 (2017).
- Consumer prices (end of period): 2.3 (2015); 4.3 (2016); 1.8 (2017); 4.1 (2018).
- Unemployment rate (percent): 7.9 (2015); 7.3 (2016); 7.1 (2017); 6.9 (2018); 6.8 (2019); 6.7 (2020).
- Exports of goods and services, f.o.b. (annual percent change): -10.1 (2015); -3.5 (2016); 5.9 (2017); 5.0 (2018); 5.5 (2019); 5.7 (2020).
- Tourism receipts (annual percent change): -1.0 (2015); 9.8 (2016); 11.2 (2017); 7.2 (2018); 7.7 (2019); 7.8 (2020).
- Imports of goods and services, f.o.b. (annual percent change): -12.2 (2015); -1.7 (2016); 11.4 (2017); 6.2 (2018).
- Net foreign assets (annual change in percent): 15.6 (2015); 0.7 (2016); 5.3 (2017); 6.0 (2018); 6.3 (2019); 6.5 (2020); 7.6 (2021).
- Net claims on government (annual change in percent): -6.2 (2015); 29.1 (2016); 28.5 (2017); 8.1 (2018); 8.3 (2019); 5.2 (2020).
- Credit to non-government sector (annual change in percent): -0.8 (2015); 6.1 (2016); 5.4 (2017); 5.8 (2018).
- Broad money (annual change in percent): 6.6 (2015); 7.0 (2016).
- Overall consolidated balance (including grants, percent of GDP): -3.7 (2015); -3.3 (2016); -2.9 (2017); -3.0 (2018); -2.8 (2019).
- Primary balance (excluding grants, percent of GDP): -1.4 (2015); -1.5 (2016); -1.8 (2017); -1.6 (2018).
- Revenues (incl. grants, percent of GDP): 20.8 (2015); 21.1 (2016); 21.4 (2017); 23.3 (2018); 22.4 (2019); 22.1 (2020); 22.0 (2021); 21.7 (2022); 21.6 (2023); 21.5 (2024).
- Expenditure, excl. net lending (percent of GDP): 24.5 (2015); 24.4 (2016); 24.3 (2017); 27.1 (2018); 25.4 (2019); 25.1 (2020); 24.9 (2021); 24.6 (2022); 24.2 (2023).
- Domestic debt of central government (percent of GDP): 46.9 (2015); 49.2 (2016); 47.9 (2017); 49.4 (2018); 48.5 (2019); 48.6 (2020); 48.2 (2021); 47.5 (2022); 46.8 (2023); 46.1 (2024); 45.3 (projection year unspecified).
- External debt of central government (percent of GDP): 12.7 (2015); 10.4 (2016); 9.4 (2017); 8.6 (2018); 9.5 (2019); 9.2 (2020); 9.6 (2021).
- Gross domestic investment (percent of GDP): 18.1 (2015); 17.9 (2016); 18.3 (2017); 18.4 (2018); 21.2 (2019); 20.3 (2020); 20.4 (2021); 20.9 (2022).
- Public investment (percent of GDP): 4.7 (2015); 4.4 (2016).
- Private investment (percent of GDP): 13.4 (2015); 13.5 (2016); 14.1 (2017); 13.6 (2018); 14.4 (2019); 14.6 (2020); 14.9 (2021); 15.1 (2022).
- Gross national savings (percent of GDP): 16.8 (2015); 17.3 (2016); 17.1 (2017); 16.9 (2018); 15.5 (2019); 15.4 (2020); 16.3 (2021).
- Balance of goods and services (percent of GDP): -10.0 (2015); -10.3 (2016); -13.5 (2017); -13.7 (2018); -15.0 (2019); -13.8 (2020); -10.5 (2021); -9.1 (2022); -7.6 (2023).
- Current account balance (percent of GDP): -3.6 (2015); -4.0 (2016); -5.6 (2017); -7.4 (2018); -6.7 (2019); -5.7 (2020); -5.5 (2021); -5.3 (2022); -5.0 (2023).
- Capital and financial account (percent of GDP): 9.3 (2015); 10.9 (2016); 10.8 (2017); 8.0 (2018); 7.5 (2019).
- Overall balance (percent of GDP): 4.9 (2015); 0.6 (2016); 0.8 (2017); (2018 value not displayed in table excerpt).
- Total external debt (percent of GDP): 90.3 (2015); 86.6 (2016); 77.0 (2017); 78.5 (2018); 83.0 (2019); 82.9 (2020); 81.6 (2021); 80.4 (2022); 79.7 (2023); 78.9 (2024).
- Gross international reserves (millions of U.S. dollars): 4,222 (2015); 4,934 (2016); 5,974 (2017); 6,329.9 (2018); 6,423 (2019); 6,552 (2020); 6,754 (2021); 6,978 (2022); 7,178 (2023); 7,534 (2024).
- Months of imports of goods and services, f.o.b.: 8.2 (2015); 9.1 (2016).
- GDP at current market prices (billions of Mauritian rupees): 409.9 (2015); 434.8 (2016); 457.5 (2017); 485.2 (2018); 517.0 (2019); 553.5 (2020); 592.9 (2021); 634.6 (2022); 676.6 (2023); 720.6 (2024).
- GDP at current market prices (millions of U.S. dollars): 11,692 (2015); 12,232 (2016); 13,267 (2017); 14,277 (2018); 14,812 (2019); 15,757 (2020); 16,757 (2021); 17,856 (2022); 18,929 (2023); 20,051 (2024).
- Public sector debt, fiscal year (percent of GDP): 66.9 (2015); 65.0 (2016); 63.7 (2017); 64.9 (2018); 67.5 (2019); 67.8 (2020); 66.7 (2021); 65.5 (2022); 64.4 (2023); 63.3 (2024).
- Public sector debt, calendar year (percent of GDP): 63.6 (2015); 65.1 (2016).
- Foreign and local currency long-term debt rating (Moody's): Baa1.
IMF Executive Board Concludes 2019 Article IV Consultation with Mauritius (Press Release No. 19/125, April 23, 2019).