## IMF Staff Completes 2021 Article IV Mission to Mauritius _IMF News, May 7, 2021_ ## Source details **Canonical URL:** [IMF Staff Completes 2021 Article IV Mission to Mauritius](https://www.imf.org/en/news/articles/2021/05/07/pr21125-mauritius-imf-staff-completes-2021-article-iv-mission) ## Other formats - [Markdown version](/en/news/articles/2021/05/07/pr21125-mauritius-imf-staff-completes-2021-article-iv-mission/index.md) - [Structured JSON version](/en/news/articles/2021/05/07/pr21125-mauritius-imf-staff-completes-2021-article-iv-mission/index.json) - [Bundle manifest](/en/news/articles/2021/05/07/pr21125-mauritius-imf-staff-completes-2021-article-iv-mission/bundle-manifest.json) ## Bibliographic details - Published: May 7, 2021 --- ### Mission overview and timing - Press Release No. 21/125 - Mission leader: Cemile Sancak - Virtual visit conducted during April 19-May 7, 2021 to conduct discussions for the 2021 Article IV consultations. - Statement issued in Washington on May 7, 2021. ### Public health assessment - Mauritius has been successful in containing the Covid-19 pandemic so far thanks to strict health measures. - Key public health actions taken: - Strict nationwide lockdown during March-May 2020. - Closure of the border until early October 2020. - Extensive testing, robust contact tracing, and strict isolation of suspected and confirmed cases. - Mask requirements in all public places. - As border restrictions were eased: comprehensive testing of arrivals and strict quarantine requirements. - An outbreak led to a second lockdown in March 2021 that was shorter in duration and more flexible than the previous year. - Vaccinations began in February 2021 with the authorities targeting vaccinating 60 percent of the population by July 2021. ### Economic impact and near-term outlook - The pandemic has seriously impacted the economy due to the sharp decline in tourism. - Contraction: real GDP contracted by nearly 15 percent in 2020. - IMF staff projection: growth to be about 5 percent in 2021, assuming some recovery in tourism. - Uncertainty: tourism flows remain uncertain and depend on the propensity to travel as the pandemic recedes and conditions in other countries. - Key short-term policy stance: accommodative fiscal and monetary stances are appropriate during the reopening phase. ### Fiscal policy findings and recommendations - The mission supported the authorities’ overall fiscal policy response, noting a large and comprehensive set of stimulus measures implemented to mitigate the pandemic’s impact, including a wage subsidy and income support for the self-employed. - Recommendations: - Continue the accommodative fiscal stance during the reopening phase with prioritized and targeted expenditures to set the stage for resilient growth. - Prioritize programs consistent with medium-term development needs and broader social and environmental goals, such as digitalization, inclusion, and climate change mitigation during the recovery phase. - Prepare plans for fiscal consolidation to stabilize debt in the medium term once Mauritius has firmly emerged from the pandemic to preserve fiscal sustainability and build buffers. - Public debt outlook: substantial increase in public debt level, which is likely to exceed 90 percent of GDP in the wake of the crisis. ### Monetary policy findings and recommendations - The mission supported the monetary policy response and advised the central bank to maintain accommodative monetary policy in the near term. - Recommendations for strengthening monetary policy: - Strengthen the monetary policy lever in anticipation of the waning of the crisis. - Phase in mechanisms to further support the central bank’s credibility and solidify an effective monetary policy as the economy recovers to a normal level of capacity utilization and the need for monetary policy normalization becomes apparent. - The central bank law is being reformed, including to preempt further exceptional transfers to the government, in line with international best practices. - The central bank should relinquish ownership of the Mauritius Investment Corporation (MIC), and financing of the MIC should be provided through the budgetary process. ### Structural transformation, competitiveness, and financial integrity - During the recovery phase, authorities should prioritize support measures to further improve competitiveness, enhance diversification, and accelerate long-term structural transformation to make Mauritius a sustainable and resilient economy built on education and technology. - The mission welcomed the authorities’ concerted efforts to exit from the Financial Action Task Force (FATF) and European Union Anti-Money Laundering/ Combating the Financing of Terrorism (AML/CFT) lists and encouraged them to keep up these efforts. ### Stakeholder engagement and assistance - The mission met with: Prime Minister Pravind Jugnauth; Minister of Finance, Economic Planning and Development Dr. Renganaden Padayachy; Governor of the Bank of Mauritius Harvesh Seegolam; other senior government and Bank of Mauritius officials; the opposition leader; representatives of the private sector; civil society; and the diplomatic community. - The IMF stands ready to assist the authorities in the implementation of their economic program, including through the provision of capacity development, and looks forward to continuing fruitful policy dialogue. *Source: IMF press release — IMF Staff Completes 2021 Article IV Mission to Mauritius (May 7, 2021).* --- ## 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) - [Press Releases](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2021/05/07/pr21125-mauritius-imf-staff-completes-2021-article-iv-mission_