{
  "title": "IMF Executive Board Concludes 2025 Article IV Consultation with Mauritius",
  "publication": "IMF News, June 18, 2025",
  "sourceUrl": "https://www.imf.org/en/news/articles/2025/06/18/pr-25204-mauritius-imf-concludes-2025-article-iv-consultation",
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  "summary": "The Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation for Mauritius.",
  "publishDate": "2025-06-18",
  "sections": [
    {
      "heading": "Economic performance and near-term drivers",
      "content": "- Real GDP grew by 4.7 percent in 2024, down from 5.0 percent in 2023, driven by services, construction, and tourism.\n- Headline inflation (12-month average) declined to 2.5 percent in March 2025 from 7.0 percent in 2023.\n- External current account deficit widened in 2024 to 6.5 percent of GDP, mostly reflecting higher imports and freight costs.\n- Gross foreign reserves increased to US$8.5 billion by end-2024, covering almost 12 months of imports.\n- Key challenges noted: high public debt, significant public investment needs, low productivity, and an ageing society."
    },
    {
      "heading": "Outlook and risks",
      "content": "- Real GDP growth projected at 3.0 percent in 2025 due to weakening external demand, easing tourism activity, and the drought.\n- Medium-term growth expected at around 3.4 percent, reflecting demographic headwinds and labor shortages.\n- Inflation projected to average 3.6 percent in 2025 and remain within BOM’s target range over the medium term.\n- External current account deficit projected to reduce to 4.7 percent of GDP in 2025 and increase in 2026 due to subdued exports, then gradually decline thereafter.\n- Public sector debt projected at around 88 percent of GDP at end-June 2025, and to gradually decline in the medium term.\n- Downside risks: global uncertainty, tariff wars, higher-than-anticipated fuel and food prices, and extreme climate shocks."
    },
    {
      "heading": "Fiscal assessment and policy recommendations",
      "content": "- Recommendation: pursue frontloaded growth-friendly consolidation to rebuild fiscal space while protecting the most vulnerable.\n- Revenue and spending guidance:\n  - Increase tax revenue.\n  - Contain current and ESFs’ spending while safeguarding critical social spending and growth-enhancing capital spending.\n- Pension reform: “Pension system reform remains key to support fiscal sustainability,” especially given population ageing.\n- Public financial management: strengthen PFM, including streamlining ESFs, to support consolidation, transparency, and governance.\n- Projection: Primary fiscal deficit (excluding grants) for FY24/25 projected to worsen by 3.4 ppt of GDP relative to FY23/24, to 6.5 percent of GDP, mostly driven by higher compensation of employees, social benefits, and grants and transfers."
    },
    {
      "heading": "Monetary policy, central bank governance, and FX",
      "content": "- Recommendation: BOM should start to gradually phase out its ownership of MIC.\n- Recommendation: strengthen the monetary policy framework by resuming uncapped issuance of 7-Day BOM bills (at the key policy rate).\n- BOM should stand ready to tighten monetary policy if inflationary pressures reemerge.\n- Suggested legal reforms: adopt amendments to the BOM Act, including to ensure fiscal backing, to protect central bank independence.\n- Encourage stronger commitment between Ministry of Finance and BOM on mutual agreement for BOM independence.\n- Exchange rate and reserves policy: continue to rely on exchange rate flexibility and FX purchases when opportunities arise, aligned with the monetary policy framework, to build foreign reserves buffers."
    },
    {
      "heading": "External sector and financial sector vigilance",
      "content": "- Assessment: Mauritius’ external position at end-2024 is weaker than the level implied by fundamentals and desirable policies.\n- Recommendation: advance structural reforms to foster external competitiveness and reduce external imbalances.\n- AML/CFT: steady progress welcomed; sustain efforts including provisions related to non-resident and cross-border activity.\n- Financial sector: continue close monitoring of risks, including in the real estate sector.\n- Statistical improvements: sustain efforts to improve external sector statistics, including measurement of the GBCs sector; address statistical gaps and discrepancies."
    },
    {
      "heading": "Structural reforms to boost private-sector led growth",
      "content": "- Priorities:\n  - Strengthen workers’ skills through better education.\n  - Narrow gender gaps.\n  - Advance climate adaptation efforts to support economic resilience.\n- Objective: boost investment and innovation to secure longer-term private sector-led growth."
    },
    {
      "heading": "Selected key statistics (as reported)",
      "content": "- Real GDP: 4.7 percent (2024); projected 3.0 percent (2025); medium-term ~3.4 percent.\n- Real GDP per capita growth: 4.9 percent (2024); projected 3.2 percent (2025).\n- GDP per capita (U.S. dollars): 11,883 (2024); 12,448 (2025); 13,287 (2026); 14,183 (2027); 15,128 (2028); 16,131 (2029); 17,190 (2030).\n- Consumer prices inflation (12-month average): 2.5 percent (March 2025); 7.0 percent (2023).\n- Inflation projection: 3.6 percent (2025).\n- External current account deficit: 6.5 percent of GDP (2024); projected 4.7 percent of GDP (2025).\n- Gross foreign reserves: US$8.5 billion (end-2024); projected US$8,675 million (2025); US$9,163 million (2026); US$9,475 million (2027); US$9,781 million (2028); US$10,083 million (2029); US$10,420 million (2030).\n- Months of imports coverage: almost 12 months (end-2024); 11.1 months (2024 in table).\n- Public sector debt (fiscal year percent of GDP): 88.3 (2024); 89.1 (2025); projected gradual decline to 82.7 (2030).\n- Primary balance (excluding grants): -6.5 percent of GDP (FY24/25 projection); then -3.0 (2026), -1.3 (2027), 0.1 (2028).\n- Revenues (incl. grants): 25.7 percent of GDP (2024); projected 27.0 percent (2025).\n- Expenditure, excl. net lending: 32.3 percent of GDP (2024); projected 31.2 percent (2025).\n- Exports of goods and services growth: 2.3 percent (2024); projected 7.1 percent (2025).\n- Tourism receipts: -4.6 percent (2024); projected 5.3 percent (2025); further medium-term path reported in table.\n- Total external debt: 139.2 percent of GDP (2024); projected 128.9 (2025); 119.3 (2026); 110.8 (2027); 102.2 (2028); 94.1 (2029); 87.1 (2030).\n\nIMF Executive Board Concludes 2025 Article IV Consultation with Mauritius — Press Release No. 25/204 (June 18, 2025).\n\n---\n\n\n References\n\n- Mauritius and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2025/06/18/pr-25204-mauritius-imf-concludes-2025-article-iv-consultation"
    }
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    "Published: June 18, 2025",
    "Real GDP grew by 4.7 percent in 2024, down from 5.0 percent in 2023, driven by services, construction, and tourism.",
    "Headline inflation (12-month average) declined to 2.5 percent in March 2025 from 7.0 percent in 2023.",
    "External current account deficit widened in 2024 to 6.5 percent of GDP, mostly reflecting higher imports and freight costs.",
    "Gross foreign reserves increased to US$8.5 billion by end-2024, covering almost 12 months of imports.",
    "Key challenges noted: high public debt, significant public investment needs, low productivity, and an ageing society.",
    "Real GDP growth projected at 3.0 percent in 2025 due to weakening external demand, easing tourism activity, and the drought.",
    "Medium-term growth expected at around 3.4 percent, reflecting demographic headwinds and labor shortages.",
    "Inflation projected to average 3.6 percent in 2025 and remain within BOM’s target range over the medium term.",
    "External current account deficit projected to reduce to 4.7 percent of GDP in 2025 and increase in 2026 due to subdued exports, then gradually decline thereafter.",
    "Public sector debt projected at around 88 percent of GDP at end-June 2025, and to gradually decline in the medium term.",
    "Downside risks: global uncertainty, tariff wars, higher-than-anticipated fuel and food prices, and extreme climate shocks.",
    "Recommendation: pursue frontloaded growth-friendly consolidation to rebuild fiscal space while protecting the most vulnerable.",
    "Revenue and spending guidance:",
    "Pension reform: “Pension system reform remains key to support fiscal sustainability,” especially given population ageing.",
    "Public financial management: strengthen PFM, including streamlining ESFs, to support consolidation, transparency, and governance.",
    "Projection: Primary fiscal deficit (excluding grants) for FY24/25 projected to worsen by 3.4 ppt of GDP relative to FY23/24, to 6.5 percent of GDP, mostly driven by higher compensation of employees, social benefits, and grants and transfers.",
    "Recommendation: BOM should start to gradually phase out its ownership of MIC.",
    "Recommendation: strengthen the monetary policy framework by resuming uncapped issuance of 7-Day BOM bills (at the key policy rate).",
    "BOM should stand ready to tighten monetary policy if inflationary pressures reemerge.",
    "Suggested legal reforms: adopt amendments to the BOM Act, including to ensure fiscal backing, to protect central bank independence.",
    "Encourage stronger commitment between Ministry of Finance and BOM on mutual agreement for BOM independence.",
    "Exchange rate and reserves policy: continue to rely on exchange rate flexibility and FX purchases when opportunities arise, aligned with the monetary policy framework, to build foreign reserves buffers.",
    "Assessment: Mauritius’ external position at end-2024 is weaker than the level implied by fundamentals and desirable policies.",
    "Recommendation: advance structural reforms to foster external competitiveness and reduce external imbalances.",
    "AML/CFT: steady progress welcomed; sustain efforts including provisions related to non-resident and cross-border activity.",
    "Financial sector: continue close monitoring of risks, including in the real estate sector.",
    "Statistical improvements: sustain efforts to improve external sector statistics, including measurement of the GBCs sector; address statistical gaps and discrepancies.",
    "Priorities:",
    "Objective: boost investment and innovation to secure longer-term private sector-led growth.",
    "Real GDP: 4.7 percent (2024); projected 3.0 percent (2025); medium-term ~3.4 percent.",
    "Real GDP per capita growth: 4.9 percent (2024); projected 3.2 percent (2025).",
    "GDP per capita (U.S. dollars): 11,883 (2024); 12,448 (2025); 13,287 (2026); 14,183 (2027); 15,128 (2028); 16,131 (2029); 17,190 (2030).",
    "Consumer prices inflation (12-month average): 2.5 percent (March 2025); 7.0 percent (2023).",
    "Inflation projection: 3.6 percent (2025).",
    "External current account deficit: 6.5 percent of GDP (2024); projected 4.7 percent of GDP (2025).",
    "Gross foreign reserves: US$8.5 billion (end-2024); projected US$8,675 million (2025); US$9,163 million (2026); US$9,475 million (2027); US$9,781 million (2028); US$10,083 million (2029); US$10,420 million (2030).",
    "Months of imports coverage: almost 12 months (end-2024); 11.1 months (2024 in table).",
    "Public sector debt (fiscal year percent of GDP): 88.3 (2024); 89.1 (2025); projected gradual decline to 82.7 (2030).",
    "Primary balance (excluding grants): -6.5 percent of GDP (FY24/25 projection); then -3.0 (2026), -1.3 (2027), 0.1 (2028).",
    "Revenues (incl. grants): 25.7 percent of GDP (2024); projected 27.0 percent (2025).",
    "Expenditure, excl. net lending: 32.3 percent of GDP (2024); projected 31.2 percent (2025).",
    "Exports of goods and services growth: 2.3 percent (2024); projected 7.1 percent (2025).",
    "Tourism receipts: -4.6 percent (2024); projected 5.3 percent (2025); further medium-term path reported in table.",
    "Total external debt: 139.2 percent of GDP (2024); projected 128.9 (2025); 119.3 (2026); 110.8 (2027); 102.2 (2028); 94.1 (2029); 87.1 (2030).",
    "[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)"
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