## IMF Staff Completes 2019 Article IV Mission to Mauritius

_IMF News, January 30, 2019_

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## Bibliographic details
- Published: January 30, 2019

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### Mission visit and statement
- An IMF mission led by Mahvash Qureshi visited Mauritius during January 16–30, 2019 to conduct the discussions for the 2019 Article IV consultations.
- At the conclusion of the visit, Ms. Qureshi issued a statement in Port Louis on January 30, 2019.
- Press contact listed: PRESS OFFICER: Lucie Mboto Fouda; Phone: +1 202 623-7100; Email: MEDIA@IMF.org.

### Economic performance and projections
- Real GDP:
  - Real GDP expanded by 3.8 percent in 2017.
  - Real GDP growth is projected at 3.8 percent in 2018 and 3.9 percent in 2019.
  - The mission noted growth in 2019 is expected to be driven by robust performance in the financial services, construction, and tourism sectors.
- Inflation and labor market:
  - Inflationary pressures have receded.
  - The unemployment rate has fallen to its lowest level in a decade.
  - With international oil prices expected to decline in 2019, inflation is projected to drop further.
- External sector:
  - The external balance continues to deteriorate due to a rising trade deficit in goods.
  - The current account deficit is expected to widen to about 7 percent of GDP owing to higher capital imports associated with large-scale public infrastructure projects.
- Fiscal and public debt:
  - The fiscal deficit in FY2017/18 was about 0.3 percent of GDP lower than budgeted.
  - Public sector debt decreased to 63.7 percent of GDP at the end of the fiscal year from 65.0 percent of GDP in FY 2016/17.
  - Given the expansionary fiscal stance in FY2018/19 and external borrowing to finance public investment in infrastructure, public sector debt is projected to increase.

### Risks, challenges, and fiscal stance
- Key challenges identified:
  - Boosting inclusive economic growth.
  - Preserving fiscal sustainability.
  - Regaining external competitiveness.
  - Maintaining financial integrity and stability.
- Fiscal policy advice:
  - To preserve macroeconomic stability, especially given the rapidly aging population, the mission advised the authorities to adopt prudent fiscal policies that would set public sector debt firmly on a declining path into the medium term.
- Monetary policy:
  - The monetary policy stance is broadly appropriate at the current juncture.
  - Given the upside risks to inflation, vigilance is warranted against any emerging inflationary pressures.

### Reforms, structural initiatives, and institutional integrity
- Reforms and initiatives noted:
  - Adoption of the Business Facilitation Act.
  - Finalization of the Financial Sector Blueprint.
  - Programs to support youth skill development, small-scale entrepreneurs, and female labor force participation.
  - Improvement in the World Bank’s Doing Business 2019 indicator.
- Implementation and coordination:
  - The mission recommended strengthening coordination and synergies between the various reforms and initiatives, and enhancing interaction among stakeholders to improve effectiveness and efficiency.
- Anti–money laundering / countering the financing of terrorism (AML/CFT):
  - The mission welcomed the authorities’ ongoing efforts to strengthen the AML/CFT framework in line with the Financial Action Task Force (FATF) recommendations.
  - The mission reiterated the need for maintaining strong and independent institutions to address policy challenges and remain an attractive investment destination.

### Financial sector and stability
- Activity in the offshore global business sector has remained broadly resilient while reforms to the sector are underway.
- A prudent stance by financial services firms and supervisory agencies has helped to maintain financial stability.

### Mission engagements and cooperation
- The mission met with:
  - The Prime Minister and Minister of Finance and Economic Development, Pravind Jugnauth.
  - Minister of Financial Services, Good Governance and Institutional Reforms, Dharmendar Sesungkur.
  - Governor of the Bank of Mauritius, Yandraduth Googoolye.
  - The Financial Secretary, Dharam Dev Manraj.
  - Other senior government officials, the opposition leader, representatives of the private sector, academia, civil society, unions, and the donor community.
- The mission expressed gratitude for productive discussions, excellent cooperation, and hospitality.
- The IMF stands ready to assist the authorities in the implementation of their economic program, including through the provision of technical assistance, and looks forward to continuing fruitful policy dialogue.

*IMF Press Release No. 19/22 — January 30, 2019.*

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## References

- [Mauritius and the IMF](http://www.imf.org/external/country/MUS/index.htm)
- [IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)
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_Source: https://www.imf.org/en/news/articles/2019/01/30/pr1922-imf-staff-completes-2019-article-iv-mission-to-mauritius_