IMF Staff Completes 2025 Article IV Mission to Mauritius
IMF News, April 11, 2025
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- IMF Staff Completes 2025 Article IV Mission to Mauritius
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Bibliographic details
- Published: April 11, 2025
Mission details
- IMF mission led by Mariana Colacelli visited Mauritius from March 31 to April 11, 2025, to conduct the 2025 Article IV Consultation.
- Press release date: April 11, 2025.
- End-of-mission statement conveys preliminary findings of IMF staff; these views do not necessarily represent the views of the IMF’s Executive Board.
Economic performance and outlook
- Real GDP grew by 4.7 percent in 2024, driven by services, construction, and tourism.
- Real GDP growth is projected to soften to 3.0 percent in 2025 due to weakening external demand, easing tourism activity, and the severe drought.
- Headline inflation:
- Eased in 2024 to 3.6 percent from 7.0 percent in 2023.
- Was 2.5 percent in March (2025), remaining within the Bank of Mauritius’ (BOM) target range of 2-5 percent.
- Drivers of lower inflation: declining international food and energy prices, and lower fuel excise duties.
- External sector:
- The external current account deficit is estimated to have widened in 2024.
- Foreign reserves increased to US$ 8.4 billion at end-2024.
Risks and vulnerabilities
- Downside risks:
- Deterioration in global growth and higher uncertainty in trade and financial markets could dampen growth.
- Delays in recalibrating the macroeconomic policy mix could lead to a disorderly adjustment.
- Extreme climate events could damage infrastructure and agriculture, weakening tourism and growth.
- Macro-financial risks to monitor:
- Risks associated with global business companies operating in the Mauritius International Financial Center.
- Risks in the real estate sector.
Fiscal policy, debt, and recommendations
- Fiscal stance:
- As in fiscal year 2023/24, the fiscal policy stance in fiscal year 2024/25 is expected to be expansionary.
- The primary fiscal deficit is projected to widen to 6.6 percent of GDP, excluding grants.
- Public debt is projected to reach almost 90 percent of GDP at end-June 2025.
- Policy recommendations:
- Implement an ambitious medium-term growth-friendly fiscal consolidation plan, starting in fiscal year 2025/26, to rebuild fiscal space and support fiscal sustainability.
- Boost tax revenue.
- Reduce current spending while protecting the most vulnerable.
- Strengthen fiscal governance.
Monetary policy, reserves, and central bank governance
- Since 2023, the monetary policy stance has become less accommodative and inflation has decreased to BOM’s target range.
- Recommendations:
- BOM should remain ready to further tighten the monetary policy stance should inflationary pressures revive.
- Strengthen implementation of the monetary policy framework.
- Safeguard BOM independence.
- Conserve foreign reserves to enhance resilience to external shocks.
- Support for authorities’ plans to gradually phase out the BOM’s ownership of the Mauritius Investment Corporation.
Structural reforms and climate resilience
- Priority reforms to reduce external imbalances and foster private sector-led growth:
- Improve governance.
- Sustain compliance with Anti Money Laundering/Combating the Financing of Terrorism (AML/CFT) standards.
- Boost private sector competitiveness.
- Enhance labor supply and skills.
- Advance climate resilience measures to protect infrastructure, agriculture, and tourism.
Source: IMF Staff press release, April 11, 2025.