{
  "title": "Public Information Notice: IMF Executive Board Concludes 2012 Article IV Consultation with Mauritius",
  "publication": "IMF News, March 19, 2012",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/53/pn1227",
  "canonical": "https://www.imf.org/en/news/articles/2015/09/28/04/53/pn1227",
  "overlayPath": "/en/news/articles/2015/09/28/04/53/pn1227/index.md",
  "summary": "Each Public Information Notice contains a background section, a table of selected economic indicators, and an Executive Board assessment.",
  "publishDate": "2012-03-19",
  "sections": [
    {
      "heading": "Background: 2011 developments and policy actions",
      "content": "- Real GDP growth is estimated to remain at around 4 percent, driven mostly by growth in textiles, ICT, financial services, and real estate.\n- Inflationary pressures:\n  - Year-on-year inflation rate tripled to 6.6 percent in June (mainly on account of import prices and one-time increases in administered prices).\n  - Jumped to 7 percent in November 2011 due to one-time increases in alcohol and tobacco excises.\n  - By December, year-on-year inflation fell to 4.9 percent as base effects became absorbed.\n- Fiscal outcomes and public debt:\n  - The overall deficit is estimated to have narrowed to 2.4 percent of GDP.\n  - Structural primary deficit excluding grants decreased from 0.3 percent of GDP in 2010 to 0.1 percent.\n  - Capital expenditures were almost 1 percentage point of GDP lower than anticipated.\n  - Net accumulation of resources in extra budgetary funds of almost 1 percent of GDP.\n  - Public sector debt declined to 56 percent of GDP.\n- Monetary policy and liquidity management:\n  - Key repo rate increased cumulatively by 65 basis points in response to inflationary developments.\n  - Cash reserve requirements increased from 6 to 7 percent in February.\n  - BOM issued Bank of Mauritius Bills and Notes with maturities of up to four years.\n  - Repo rate increases: 50 basis points in March and 25 basis points in June, then lowered by 10 basis points in December.\n  - Private sector credit growth estimated at 13 percent for 2011.\n  - BOM intervened in the foreign exchange market to smooth excess volatility and later to limit rupee appreciation; most interventions sterilized.\n  - BOM profitability was reduced in 2011 as a result of its liquidity management.\n- Banking sector performance:\n  - Banks remained liquid and well-capitalized, with 14.1 percent of Regulatory Tier I capital to risk-weighted assets in June.\n  - Non-performing loans decreased from 2.8 percent of gross loans at end-2010 to 2.6 percent by June 2011.\n  - Banks remained profitable with 21.5 percent return on equity.\n  - In June 2011, the BOM started publishing CAMEL rating of domestic banks.\n- External sector:\n  - Exports increased some 16 percent (in dollar terms) with strong growth across major tradable industries.\n  - Tourism receipts grew some 12 percent, though fourth quarter arrivals from key EU markets fell.\n  - Imports increased 17 percent, and a reduction in net transfers widened the current account deficit to some 10 percent of GDP.\n  - The deficit was more than covered with portfolio inflows and official loan disbursements.\n  - International reserves increased in nominal terms; reserve cover in terms of imports of goods and services slipped to 4.4 months.\n- Structural and statistical developments:\n  - Wide-ranging structural reforms over two decades have positioned Mauritius as a top regional performer.\n  - Mauritius subscribed to the Special Data Dissemination Standard (SDDS) in February 2012."
    },
    {
      "heading": "Executive Board Assessment: views, priorities, and recommendations",
      "content": "- Overall judgment:\n  - Executive Directors agreed with the thrust of the staff appraisal and commended the authorities’ skillful policy response to the global crisis.\n  - The growth outlook for 2012 is broadly positive, although external risks have increased.\n  - Key priorities: sustain fiscal consolidation, reduce external imbalances, enhance competitiveness and public sector service delivery, and foster inclusive growth.\n- Fiscal policy:\n  - Directors acknowledged the need for higher public investment to remove infrastructure bottlenecks.\n  - Most Directors saw merit in a slightly less expansionary fiscal stance than projected for 2012 to build policy buffers.\n  - In case of a significant slowdown, contingent measures in the budget can be used and automatic stabilizers should be allowed to operate.\n  - Fiscal consolidation needs to be sustained to reduce debt vulnerabilities and achieve Mauritius’ debt reduction targets.\n  - Emphasis on reform of the social protection system and public enterprises, rationalizing subsidies, better targeting social benefits, and developing a financial monitoring framework to minimize transfers to state owned enterprises, implement full cost recovery, and enhance governance.\n- Monetary policy and inflation:\n  - Directors welcomed efforts to ensure price stability and supported continuing efforts to remove excess liquidity.\n  - Welcomed future plans to adopt formal inflation targeting to help anchor inflation expectations and supported initiatives to strengthen capacity within the central bank.\n- Exchange rate and external buffers:\n  - Staff assessment that the real exchange rate is broadly in line with fundamentals was noted.\n  - Directors agreed the floating regime has served the economy well and exchange rate interventions should be limited to smoothing volatility.\n  - An adequate reserve cushion together with a stronger fiscal position and improved competitiveness are important to reduce external imbalances and safeguard against shocks.\n- Financial sector oversight:\n  - Directors noted the banking system is well capitalized and resilient to shocks.\n  - They welcomed efforts to increase transparency and plans to strengthen supervisory coordination, enhance the stress testing framework, and improve data availability in the financial sector.\n- Inclusive growth:\n  - Continued efforts needed to secure more inclusive and diversified growth, including investments in human and physical infrastructure and further improvements in the business environment.\n- Commendation:\n  - Directors commended Mauritius’ subscription to the Special Data Dissemination Standard (SDDS) in February 2012."
    },
    {
      "heading": "Selected economic and financial indicators (highlights from the 2009–2017 series)",
      "content": "- Real GDP (annual growth): 3.0 (2009); 4.1 (2010); 4.2 (2011); 3.7 (2012, projection)\n- GDP per capita (U.S. dollars, selected values): 6,919 (2009); 7,582 (2010); 7,990 (2011); 8,385 (2012)\n- Consumer prices (period average): 2.9 (2009); 7.4 (2010); 6.5 (2011); 4.6 (2012)\n- Exports of goods and services, f.o.b. (annual percent changes): -15.6 (2009); 18.9 (2010); 12.5 (2011); 15.5 (2012)\n- Tourism receipts (annual percent changes): -23.5 (2009); 15.9 (2010); 10.4 (2011); 13.5 (2012)\n- Imports of goods and services, f.o.b. (annual percent changes): -19.3 (2009); 20.5 (2010); 18.8 (2011); 17.1 (2012)\n- Broad money (end of period, annual percentage change): 8.1 (2009); 7.6 (2010); 9.3 (2011); 12.3 (2012)\n- Overall consolidated balance (including grants, percent of GDP): -2.0 (2009); -3.0 (2010); -4.8 (2011); -2.4 (2012)\n- Primary balance (including grants, percent of GDP): -1.3 (2009); 0.6 (2010); -1.0 (2011); -0.5 (2012)\n- Revenues and grants (percent of GDP): 22.8 (2009); 21.9 (2010); 21.5 (2011); 21.2 (2012)\n- Expenditure, excl. net lending (percent of GDP): 24.8 (2009); 24.9 (2010); 26.2 (2011); 23.7 (2012)\n- Domestic debt of central government (percent of GDP): 44.7 (2009); 43.1 (2010); 42.5 (2011); 41.2 (2012)\n- External debt of central government (percent of GDP): 8.9 (2009); 8.5 (2010); 10.5 (2011); 11.6 (2012)\n- Gross domestic investment (percent of GDP): 26.4 (2009); 24.4 (2010); 26.6 (2011); 25.3 (2012)\n- Gross national savings (percent of GDP): 13.8 (2009); 15.6 (2010); 14.2 (2011); 14.7 (2012)\n- Balance of goods and services (percent of GDP): -10.5 (2009); -12.1 (2010); -15.7 (2011); -13.5 (2012)\n- Current account balance (percent of GDP): -7.4 (2009); -8.2 (2010); -11.8 (2011); -9.9 (2012)\n- Net international reserves (millions of U.S. dollars): 2,150 (2009); 2,448 (2010); 2,253 (2011); 2,636 (2012)\n- Months of imports of goods and services, f.o.b. (reserve cover): 5.1 (2009); 3.8 (2010); 4.0 (2011)\n- Public sector debt (percent of GDP): 59.6 (2009); 57.3 (2010); 58.8 (2011); 56.1 (2012)\n- Foreign currency long-term debt rating (Moody's): Baa2\n\nPublic Information Notice No. 12/27, March 19, 2012.\n\n---\n\n\n References\n\n- Mauritius and the IMF\n- Public Information Notices\n- http://www.imf.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/28/04/53/pn1227"
    }
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    "Published: March 19, 2012",
    "Real GDP growth is estimated to remain at around 4 percent, driven mostly by growth in textiles, ICT, financial services, and real estate.",
    "Inflationary pressures:",
    "Fiscal outcomes and public debt:",
    "Monetary policy and liquidity management:",
    "Banking sector performance:",
    "External sector:",
    "Structural and statistical developments:",
    "Overall judgment:",
    "Fiscal policy:",
    "Monetary policy and inflation:",
    "Exchange rate and external buffers:",
    "Financial sector oversight:",
    "Inclusive growth:",
    "Commendation:",
    "Real GDP (annual growth): 3.0 (2009); 4.1 (2010); 4.2 (2011); 3.7 (2012, projection)",
    "GDP per capita (U.S. dollars, selected values): 6,919 (2009); 7,582 (2010); 7,990 (2011); 8,385 (2012)",
    "Consumer prices (period average): 2.9 (2009); 7.4 (2010); 6.5 (2011); 4.6 (2012)",
    "Exports of goods and services, f.o.b. (annual percent changes): -15.6 (2009); 18.9 (2010); 12.5 (2011); 15.5 (2012)",
    "Tourism receipts (annual percent changes): -23.5 (2009); 15.9 (2010); 10.4 (2011); 13.5 (2012)",
    "Imports of goods and services, f.o.b. (annual percent changes): -19.3 (2009); 20.5 (2010); 18.8 (2011); 17.1 (2012)",
    "Broad money (end of period, annual percentage change): 8.1 (2009); 7.6 (2010); 9.3 (2011); 12.3 (2012)",
    "Overall consolidated balance (including grants, percent of GDP): -2.0 (2009); -3.0 (2010); -4.8 (2011); -2.4 (2012)",
    "Primary balance (including grants, percent of GDP): -1.3 (2009); 0.6 (2010); -1.0 (2011); -0.5 (2012)",
    "Revenues and grants (percent of GDP): 22.8 (2009); 21.9 (2010); 21.5 (2011); 21.2 (2012)",
    "Expenditure, excl. net lending (percent of GDP): 24.8 (2009); 24.9 (2010); 26.2 (2011); 23.7 (2012)",
    "Domestic debt of central government (percent of GDP): 44.7 (2009); 43.1 (2010); 42.5 (2011); 41.2 (2012)",
    "External debt of central government (percent of GDP): 8.9 (2009); 8.5 (2010); 10.5 (2011); 11.6 (2012)",
    "Gross domestic investment (percent of GDP): 26.4 (2009); 24.4 (2010); 26.6 (2011); 25.3 (2012)",
    "Gross national savings (percent of GDP): 13.8 (2009); 15.6 (2010); 14.2 (2011); 14.7 (2012)",
    "Balance of goods and services (percent of GDP): -10.5 (2009); -12.1 (2010); -15.7 (2011); -13.5 (2012)",
    "Current account balance (percent of GDP): -7.4 (2009); -8.2 (2010); -11.8 (2011); -9.9 (2012)",
    "Net international reserves (millions of U.S. dollars): 2,150 (2009); 2,448 (2010); 2,253 (2011); 2,636 (2012)",
    "Months of imports of goods and services, f.o.b. (reserve cover): 5.1 (2009); 3.8 (2010); 4.0 (2011)",
    "Public sector debt (percent of GDP): 59.6 (2009); 57.3 (2010); 58.8 (2011); 56.1 (2012)",
    "Foreign currency long-term debt rating (Moody's): Baa2",
    "[Mauritius and the IMF](http://www.imf.org/external/country/MUS/index.htm)",
    "[Public Information Notices](https://www.imf.org/en/news/searchnews)",
    "[http://www.imf.org/external/np/sec/misc/qualifiers.htm](https://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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