{
  "title": "Mauritius: IMF Executive Board Concludes 2013 Article IV Consultation",
  "publication": "IMF News, April 3, 2013",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/53/pn1342",
  "canonical": "https://www.imf.org/en/news/articles/2015/09/28/04/53/pn1342",
  "overlayPath": "/en/news/articles/2015/09/28/04/53/pn1342/index.md",
  "summary": "Each Public Information Notice contains a background section, a table of selected economic indicators, and an Executive Board assessment.",
  "publishDate": "2013-04-03",
  "sections": [
    {
      "heading": "Background: 2012 performance and policy setting",
      "content": "- Growth decelerated to 3.3 percent in 2012, due to weak sugar and textile exports and a slowdown in the construction sector; information and communication technology and financial services sectors saw strong growth.\n- Output gap estimated to have been small (around ½ percent).\n- Consumer price inflation moderated to 3.9 percent.\n- Unemployment rate estimated to have marginally increased from 7.9 percent in 2011 to 8 percent in 2012.\n- Current account deficit narrowed but remained relatively high at 10 percent of gross domestic product (GDP) in 2012.\n- Bank of Mauritius (BOM) reserve cover of imports of goods and services rose to 4.4 months from 4.3 months at end-2011.\n- In June 2012, Moody’s upgraded the country’s credit rating to Baa1.\n- Fiscal outturn: overall deficit including extra-budgetary funds estimated at 2.3 percent of GDP in 2012, a reduction of over 1 percentage point of GDP relative to previous projections and similar to the 2011 outcome.\n  - Reduction in transfers and subsidies decreased by over 1 percent of GDP compared to 2011 (particularly transfers to state-owned enterprises).\n  - Expenditures on goods and services were lower; extra-budgetary spending increased relative to 2011.\n  - Better than expected tax revenue performance (in particular for value added tax receipts) was offset by lower non-tax revenue and grants so total revenues remained stable as a percentage of GDP.\n- Monetary policy: BOM reduced the policy rate by 50 basis points to 4.9 percent in March 2012 and maintained it thereafter.\n  - Excess liquidity in the banking system remained elevated; yield on 3-month treasury bills fell by 120 basis points to 2.7 percent at end-2012.\n  - After June 2012, authorities intervened more actively in foreign exchange markets to build international reserves and moderate rupee fluctuations.\n- Banking system: well-capitalized; Regulatory Tier I capital to risk-weighted assets well above Basel II and proposed Basel III requirements.\n  - Non-performing loans (NPL) increased slightly in 2012; banks remained profitable with a 20 percent return on equity.\n  - Liquidity-to-assets ratios have worsened and are on the low side in international comparisons.\n  - BOM circulated a consultation paper to banks in October 2012 as a first step toward gradual Basel III phase-in and continued to publish bi-annual CAMEL ratings.\n- Structural reforms and statistical capacity:\n  - Wide-ranging structural reforms over the past decade supported strong regional performance.\n  - Mauritius subscribed to the IMF’s Special Data Dissemination Standard (SDDS) in February 2012."
    },
    {
      "heading": "Executive Board assessment — key messages and recommendations",
      "content": "- Overall appraisal:\n  - Executive Directors endorsed the staff appraisal.\n  - Authorities have a good track record of prudent macroeconomic management and implementing structural reforms, delivering low inflation, declining debt-to-GDP ratios, and satisfactory growth given the external environment.\n  - Recent efforts to improve human and capital infrastructure (especially road congestion) should continue.\n- Fiscal policy:\n  - Staff recommended a neutral fiscal policy stance for 2013 to smooth medium-term fiscal consolidation and facilitate external adjustment and rebuilding of policy buffers.\n  - Over the medium term, fiscal consolidation should focus on reductions in transfers and subsidies and revenue-raising measures.\n  - Increases in the revenue-to-GDP ratio would provide additional space for priority spending on human and physical capital.\n- Monetary and financial sector policy:\n  - The current accommodative monetary policy stance remains appropriate, but authorities should be ready to tighten if inflation accelerates beyond expectations.\n  - Inflationary pressures relate to wage increases and adjustments in administered prices; expectations appear well-anchored.\n  - Excess liquidity should be reduced to better align the policy rate with market rates and strengthen the monetary transmission mechanism.\n  - The banking system is well-capitalized and profitable; stress testing indicates resilience against a range of shocks.\n  - Real estate developments should be monitored and cooperation between the BOM and the Financial Services Commission further improved.\n- External adjustment and competitiveness:\n  - Increasing national savings and fostering competitiveness would reduce the large external current account deficit.\n  - Medium-term fiscal consolidation should facilitate external adjustment.\n  - Improvements in competitiveness through structural reforms and investment in infrastructure and human capital are crucial.\n  - The floating exchange rate regime continues to serve the country well; staff estimates that the real exchange rate is broadly in line with fundamentals.\n- Pension and labor market reforms:\n  - The pension system could be used to increase national savings; recent reforms improved the system but further reforms would be helpful.\n    - An increase in mandatory contribution rates for the National Pension Fund (NPF) combined with an actuarially-sustainable increase in benefits is likely to lead to higher overall national savings.\n    - Inclusion of most public pension systems within a strengthened NPF and mandatory inclusion of self-employed workers in the NPF might be considered.\n  - Labor market reform should target employability of low-skilled youth and women (majority of the unemployed).\n    - Align education curriculum to industry needs and increase private sector involvement in vocational education to reduce skills mismatches.\n    - Review wage-setting mechanisms to align real wage increases closer with labor productivity improvements.\n    - Consider introducing an earned income tax credit to encourage low-wage earners to take jobs that build skills."
    },
    {
      "heading": "Selected economic and financial indicators (2010–2018) — notable figures preserved exactly as in source",
      "content": "- Real GDP: 4.1 (2010); 3.8 (2011); 3.7 (2012); 3.3 (2013); 4.4 (2014); 4.7 (2015); 4.6 (2016); 4.5 (2017); 2018 (not shown).\n- Real GDP per capita: 3.6 (2010); 3.4 (2011); 3.1 (2012); 2.7 (2013); 3.5 (2014); 3.2 (2015); 4.2 (2016).\n- GDP per capita (in U.S. dollars): 7,562 (2010); 8,725 (2011); 8,403 (2012); 8,850 (2013); 8,789 (2014); 9,395 (2015); 9,912 (2016); 10,486 (2017); 11,101; 11,806; 12,561 (later years shown).\n- GDP deflator: 1.7 (2010); 3.9 (2011); 5.9 (2012); 5.7 (2013); 5.0 (2014).\n- Consumer prices (period average): 2.9 (2010); 6.5 (2011); 4.8 (2012); 5.3 (2013).\n- Consumer prices (end of period): 6.1 (2010); 4.9 (2011); 5.5 (2012); 6.0 (2013); 5.1; (additional years shown).\n- Unemployment rate (percent): 7.8 (2010); 7.9 (2011); … (2012); 8.0 (2013).\n- Exports of goods and services, f.o.b.: 18.9 (2010); 19.6 (2011); 3.0 (2012); 6.7 (2013); 6.3; 6.8; 7.1; 7.3.\n  - Of which: tourism receipts: 15.9 (2010); 23.0 (2011); 10.3 (2012); 4.3 (2013); 5.4; 5.8.\n- Imports of goods and services, f.o.b.: 20.5 (2010); 20.8 (2011).\n- Real effective exchange rate (annual averages): 6.2 (2010); 1.3 (2011).\n- Net foreign assets (annual change in percent of beginning of period M2): 20.2 (2010); -7.7 (2011); 16.9 (2012); 9.2 (2013); 6.9.\n- Domestic credit (annual change): 8.6 (2010); 10.0 (2011); 14.6 (2012); 11.8 (2013).\n- Net claims on government: 1.0 (2010); -1.4 (2011); 1.5 (2012); -1.3 (2013).\n- Credit to non-government sector 1: 9.9 (2010); 10.2 (2011); 8.2 (2012); 18.2 (2013); 10.7.\n- Broad money (end of period, annual percentage change): 7.6 (2010); 12.3 (2011); 9.7 (2012).\n- Overall consolidated balance (including grants) 2 (percent of GDP): -3.0 (2010); -2.1 (2011); -3.7 (2012); -2.3 (2013); -3.2; -2.6; -1.9; -1.5; -1.8.\n- Primary balance (including grants): 0.4 (2010); -0.5 (2011); 0.7 (2012); -0.6 (2013); 0.1; 1.2; 1.1.\n- Structural primary balance (including grants): 0.8 (2010); 0.2 (2011).\n- Structural primary balance (excluding grants): -0.3 (2010); -1.2 (2011); -0.4 (2012); 0.3 (2013).\n- Revenues and grants (percent of GDP): 21.9 (2010); 21.4 (2011); 21.8 (2012); 20.9 (2013); 21.3; 20.3.\n- Expenditure, excl. net lending (percent of GDP): 24.9 (2010); 23.5 (2011); 25.5 (2012); 23.7 (2013); 24.1; 24.5; 23.2; 21.7; 22.0.\n- Domestic debt of central government (percent of GDP): 43.1 (2010); 42.6 (2011); 40.5 (2012); 41.5 (2013); 38.1; 39.7; 37.6; 37.4; 36.0; 34.5; 33.2.\n- External debt of central government (percent of GDP): 7.5 (2010); 8.4 (2011); 8.7 (2012); 11.6 (2013); 12.4; 12.6; 11.7; 10.9.\n- Gross domestic investment (percent of GDP): 23.6 (2010); 25.7 (2011); 24.8 (2012); 24.7 (2013); 25.3; 25.1; 25.6; 25.8; 25.9.\n  - Public: 7.4 (2010); 7.7 (2011); 7.2 (2012); 5.6 (2013).\n  - Private: 17.5 (2010); 19.2 (2011); 20.0 (2012); 20.4 (2013).\n- Gross national savings (percent of GDP): 13.3 (2010); 13.1 (2011); 14.8 (2012); 14.7 (2013); 16.4; 15.4; 16.2; 16.7; 18.1; 18.7; 13.8; 13.6; 13.7; 15.8; 14.1; 15.2; 17.4.\n- Balance of goods and services (percent of GDP): -12.2 (2010); -13.2 (2011); -13.8 (2012); -13.0 (2013); -12.7; -12.5; -11.8; -11.5; -10.8; -10.5; -10.1.\n- Current account balance (percent of GDP): -10.3 (2010); -12.6 (2011); -10.2 (2012); -10.0 (2013); -9.1; -9.7; -8.8; -8.1; -7.2.\n- Overall balance (percent of GDP): 2.1 (2010); 1.6 (2011); -2.4 (2012); 1.8 (2013); 1.4.\n- Total external debt 3 (percent of GDP): 22.3 (2010); 16.1 (2011); 17.7 (2012); 26.7 (2013); 26.5; 23.8.\n- Net international reserves (millions of U.S. dollars): 2,448 (2010); 2,631 (2011); 2,420 (2012); 2,834 (2013); 2,512; 2,977; 3,144; 3,298; 3,497; 3,766; 4,044.\n- GDP at current market prices (billions of Mauritian rupees): 298.8 (2010); 322.8 (2011); 350.0 (2012); 344.6 (2013); 385.9; 377.9; 412.5; 451.9; 496.2; 544.5; 597.5.\n- GDP at current market prices (millions of U.S. dollars): 9,706 (2010); 11,244 (2011); 11,466 (2012).\n- Public sector debt (percent of GDP) 4: 57.4 (2010); 57.0 (2011); 56.2 (2012); 55.7 (2013); 55.8; 54.2; 50.0; 47.6.\n- Foreign and local currency long-term debt rating (Moody's): Baa2 (2010); Baa1 (2011).\n\nSource: IMF Public Information Notice No. 13/42, April 3, 2013 — Executive Board conclusion of the 2013 Article IV consultation with Mauritius.\n\n---\n\n\n References\n\n- Mauritius and the IMF\n- Public Information Notices\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/28/04/53/pn1342"
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    "Published: April 3, 2013",
    "Growth decelerated to 3.3 percent in 2012, due to weak sugar and textile exports and a slowdown in the construction sector; information and communication technology and financial services sectors saw strong growth.",
    "Output gap estimated to have been small (around ½ percent).",
    "Consumer price inflation moderated to 3.9 percent.",
    "Unemployment rate estimated to have marginally increased from 7.9 percent in 2011 to 8 percent in 2012.",
    "Current account deficit narrowed but remained relatively high at 10 percent of gross domestic product (GDP) in 2012.",
    "Bank of Mauritius (BOM) reserve cover of imports of goods and services rose to 4.4 months from 4.3 months at end-2011.",
    "In June 2012, Moody’s upgraded the country’s credit rating to Baa1.",
    "Fiscal outturn: overall deficit including extra-budgetary funds estimated at 2.3 percent of GDP in 2012, a reduction of over 1 percentage point of GDP relative to previous projections and similar to the 2011 outcome.",
    "Monetary policy: BOM reduced the policy rate by 50 basis points to 4.9 percent in March 2012 and maintained it thereafter.",
    "Banking system: well-capitalized; Regulatory Tier I capital to risk-weighted assets well above Basel II and proposed Basel III requirements.",
    "Structural reforms and statistical capacity:",
    "Overall appraisal:",
    "Fiscal policy:",
    "Monetary and financial sector policy:",
    "External adjustment and competitiveness:",
    "Pension and labor market reforms:",
    "Real GDP: 4.1 (2010); 3.8 (2011); 3.7 (2012); 3.3 (2013); 4.4 (2014); 4.7 (2015); 4.6 (2016); 4.5 (2017); 2018 (not shown).",
    "Real GDP per capita: 3.6 (2010); 3.4 (2011); 3.1 (2012); 2.7 (2013); 3.5 (2014); 3.2 (2015); 4.2 (2016).",
    "GDP per capita (in U.S. dollars): 7,562 (2010); 8,725 (2011); 8,403 (2012); 8,850 (2013); 8,789 (2014); 9,395 (2015); 9,912 (2016); 10,486 (2017); 11,101; 11,806; 12,561 (later years shown).",
    "GDP deflator: 1.7 (2010); 3.9 (2011); 5.9 (2012); 5.7 (2013); 5.0 (2014).",
    "Consumer prices (period average): 2.9 (2010); 6.5 (2011); 4.8 (2012); 5.3 (2013).",
    "Consumer prices (end of period): 6.1 (2010); 4.9 (2011); 5.5 (2012); 6.0 (2013); 5.1; (additional years shown).",
    "Unemployment rate (percent): 7.8 (2010); 7.9 (2011); … (2012); 8.0 (2013).",
    "Exports of goods and services, f.o.b.: 18.9 (2010); 19.6 (2011); 3.0 (2012); 6.7 (2013); 6.3; 6.8; 7.1; 7.3.",
    "Imports of goods and services, f.o.b.: 20.5 (2010); 20.8 (2011).",
    "Real effective exchange rate (annual averages): 6.2 (2010); 1.3 (2011).",
    "Net foreign assets (annual change in percent of beginning of period M2): 20.2 (2010); -7.7 (2011); 16.9 (2012); 9.2 (2013); 6.9.",
    "Domestic credit (annual change): 8.6 (2010); 10.0 (2011); 14.6 (2012); 11.8 (2013).",
    "Net claims on government: 1.0 (2010); -1.4 (2011); 1.5 (2012); -1.3 (2013).",
    "Credit to non-government sector 1: 9.9 (2010); 10.2 (2011); 8.2 (2012); 18.2 (2013); 10.7.",
    "Broad money (end of period, annual percentage change): 7.6 (2010); 12.3 (2011); 9.7 (2012).",
    "Overall consolidated balance (including grants) 2 (percent of GDP): -3.0 (2010); -2.1 (2011); -3.7 (2012); -2.3 (2013); -3.2; -2.6; -1.9; -1.5; -1.8.",
    "Primary balance (including grants): 0.4 (2010); -0.5 (2011); 0.7 (2012); -0.6 (2013); 0.1; 1.2; 1.1.",
    "Structural primary balance (including grants): 0.8 (2010); 0.2 (2011).",
    "Structural primary balance (excluding grants): -0.3 (2010); -1.2 (2011); -0.4 (2012); 0.3 (2013).",
    "Revenues and grants (percent of GDP): 21.9 (2010); 21.4 (2011); 21.8 (2012); 20.9 (2013); 21.3; 20.3.",
    "Expenditure, excl. net lending (percent of GDP): 24.9 (2010); 23.5 (2011); 25.5 (2012); 23.7 (2013); 24.1; 24.5; 23.2; 21.7; 22.0.",
    "Domestic debt of central government (percent of GDP): 43.1 (2010); 42.6 (2011); 40.5 (2012); 41.5 (2013); 38.1; 39.7; 37.6; 37.4; 36.0; 34.5; 33.2.",
    "External debt of central government (percent of GDP): 7.5 (2010); 8.4 (2011); 8.7 (2012); 11.6 (2013); 12.4; 12.6; 11.7; 10.9.",
    "Gross domestic investment (percent of GDP): 23.6 (2010); 25.7 (2011); 24.8 (2012); 24.7 (2013); 25.3; 25.1; 25.6; 25.8; 25.9.",
    "Gross national savings (percent of GDP): 13.3 (2010); 13.1 (2011); 14.8 (2012); 14.7 (2013); 16.4; 15.4; 16.2; 16.7; 18.1; 18.7; 13.8; 13.6; 13.7; 15.8; 14.1; 15.2; 17.4.",
    "Balance of goods and services (percent of GDP): -12.2 (2010); -13.2 (2011); -13.8 (2012); -13.0 (2013); -12.7; -12.5; -11.8; -11.5; -10.8; -10.5; -10.1.",
    "Current account balance (percent of GDP): -10.3 (2010); -12.6 (2011); -10.2 (2012); -10.0 (2013); -9.1; -9.7; -8.8; -8.1; -7.2.",
    "Overall balance (percent of GDP): 2.1 (2010); 1.6 (2011); -2.4 (2012); 1.8 (2013); 1.4.",
    "Total external debt 3 (percent of GDP): 22.3 (2010); 16.1 (2011); 17.7 (2012); 26.7 (2013); 26.5; 23.8.",
    "Net international reserves (millions of U.S. dollars): 2,448 (2010); 2,631 (2011); 2,420 (2012); 2,834 (2013); 2,512; 2,977; 3,144; 3,298; 3,497; 3,766; 4,044.",
    "GDP at current market prices (billions of Mauritian rupees): 298.8 (2010); 322.8 (2011); 350.0 (2012); 344.6 (2013); 385.9; 377.9; 412.5; 451.9; 496.2; 544.5; 597.5.",
    "GDP at current market prices (millions of U.S. dollars): 9,706 (2010); 11,244 (2011); 11,466 (2012).",
    "Public sector debt (percent of GDP) 4: 57.4 (2010); 57.0 (2011); 56.2 (2012); 55.7 (2013); 55.8; 54.2; 50.0; 47.6.",
    "Foreign and local currency long-term debt rating (Moody's): Baa2 (2010); Baa1 (2011).",
    "[Mauritius and the IMF](http://www.imf.org/external/country/MUS/index.htm)",
    "[Public Information Notices](https://www.imf.org/en/news/searchnews)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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