IMF Executive Board Concludes 2025 Article IV Consultation with Mauritius
IMF News, June 18, 2025
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- Published: June 18, 2025
Economic performance and near-term drivers
- Real GDP grew by 4.7 percent in 2024, down from 5.0 percent in 2023, driven by services, construction, and tourism.
- Headline inflation (12-month average) declined to 2.5 percent in March 2025 from 7.0 percent in 2023.
- External current account deficit widened in 2024 to 6.5 percent of GDP, mostly reflecting higher imports and freight costs.
- Gross foreign reserves increased to US$8.5 billion by end-2024, covering almost 12 months of imports.
- Key challenges noted: high public debt, significant public investment needs, low productivity, and an ageing society.
Outlook and risks
- Real GDP growth projected at 3.0 percent in 2025 due to weakening external demand, easing tourism activity, and the drought.
- Medium-term growth expected at around 3.4 percent, reflecting demographic headwinds and labor shortages.
- Inflation projected to average 3.6 percent in 2025 and remain within BOM’s target range over the medium term.
- External current account deficit projected to reduce to 4.7 percent of GDP in 2025 and increase in 2026 due to subdued exports, then gradually decline thereafter.
- Public sector debt projected at around 88 percent of GDP at end-June 2025, and to gradually decline in the medium term.
- Downside risks: global uncertainty, tariff wars, higher-than-anticipated fuel and food prices, and extreme climate shocks.
Fiscal assessment and policy recommendations
- Recommendation: pursue frontloaded growth-friendly consolidation to rebuild fiscal space while protecting the most vulnerable.
- Revenue and spending guidance:
- Increase tax revenue.
- Contain current and ESFs’ spending while safeguarding critical social spending and growth-enhancing capital spending.
- Pension reform: “Pension system reform remains key to support fiscal sustainability,” especially given population ageing.
- Public financial management: strengthen PFM, including streamlining ESFs, to support consolidation, transparency, and governance.
- Projection: Primary fiscal deficit (excluding grants) for FY24/25 projected to worsen by 3.4 ppt of GDP relative to FY23/24, to 6.5 percent of GDP, mostly driven by higher compensation of employees, social benefits, and grants and transfers.
Monetary policy, central bank governance, and FX
- Recommendation: BOM should start to gradually phase out its ownership of MIC.
- Recommendation: strengthen the monetary policy framework by resuming uncapped issuance of 7-Day BOM bills (at the key policy rate).
- BOM should stand ready to tighten monetary policy if inflationary pressures reemerge.
- Suggested legal reforms: adopt amendments to the BOM Act, including to ensure fiscal backing, to protect central bank independence.
- Encourage stronger commitment between Ministry of Finance and BOM on mutual agreement for BOM independence.
- Exchange rate and reserves policy: continue to rely on exchange rate flexibility and FX purchases when opportunities arise, aligned with the monetary policy framework, to build foreign reserves buffers.
External sector and financial sector vigilance
- Assessment: Mauritius’ external position at end-2024 is weaker than the level implied by fundamentals and desirable policies.
- Recommendation: advance structural reforms to foster external competitiveness and reduce external imbalances.
- AML/CFT: steady progress welcomed; sustain efforts including provisions related to non-resident and cross-border activity.
- Financial sector: continue close monitoring of risks, including in the real estate sector.
- Statistical improvements: sustain efforts to improve external sector statistics, including measurement of the GBCs sector; address statistical gaps and discrepancies.
Structural reforms to boost private-sector led growth
- Priorities:
- Strengthen workers’ skills through better education.
- Narrow gender gaps.
- Advance climate adaptation efforts to support economic resilience.
- Objective: boost investment and innovation to secure longer-term private sector-led growth.
Selected key statistics (as reported)
- Real GDP: 4.7 percent (2024); projected 3.0 percent (2025); medium-term ~3.4 percent.
- Real GDP per capita growth: 4.9 percent (2024); projected 3.2 percent (2025).
- GDP per capita (U.S. dollars): 11,883 (2024); 12,448 (2025); 13,287 (2026); 14,183 (2027); 15,128 (2028); 16,131 (2029); 17,190 (2030).
- Consumer prices inflation (12-month average): 2.5 percent (March 2025); 7.0 percent (2023).
- Inflation projection: 3.6 percent (2025).
- External current account deficit: 6.5 percent of GDP (2024); projected 4.7 percent of GDP (2025).
- Gross foreign reserves: US$8.5 billion (end-2024); projected US$8,675 million (2025); US$9,163 million (2026); US$9,475 million (2027); US$9,781 million (2028); US$10,083 million (2029); US$10,420 million (2030).
- Months of imports coverage: almost 12 months (end-2024); 11.1 months (2024 in table).
- Public sector debt (fiscal year percent of GDP): 88.3 (2024); 89.1 (2025); projected gradual decline to 82.7 (2030).
- Primary balance (excluding grants): -6.5 percent of GDP (FY24/25 projection); then -3.0 (2026), -1.3 (2027), 0.1 (2028).
- Revenues (incl. grants): 25.7 percent of GDP (2024); projected 27.0 percent (2025).
- Expenditure, excl. net lending: 32.3 percent of GDP (2024); projected 31.2 percent (2025).
- Exports of goods and services growth: 2.3 percent (2024); projected 7.1 percent (2025).
- Tourism receipts: -4.6 percent (2024); projected 5.3 percent (2025); further medium-term path reported in table.
- Total external debt: 139.2 percent of GDP (2024); projected 128.9 (2025); 119.3 (2026); 110.8 (2027); 102.2 (2028); 94.1 (2029); 87.1 (2030).
IMF Executive Board Concludes 2025 Article IV Consultation with Mauritius — Press Release No. 25/204 (June 18, 2025).