{
  "title": "Mauritius: Selected Issues",
  "publication": "IMF Staff Country Reports, April 29, 2019",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2019/04/29/mauritius-selected-issue-46831",
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  "summary": "This Selected Issues paper develops a Financial Conditions Index (FCI) for Mauritius—an instrument to gauge the operational state of the financial sector and predict real economy activity.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Publication date: April 29, 2019\n- This Selected Issues paper develops a Financial Conditions Index (FCI) for Mauritius—an instrument to gauge the operational state of the financial sector and predict real economy activity.\n- The evolution of Mauritius’ financial services sector has been supported by a vibrant offshore corporate sector.\n- Financial developments are broader than monetary developments depicting money supply and interest rates."
    },
    {
      "heading": "Key findings",
      "content": "- The FCI is a robust predictor of real GDP growth in Mauritius.\n- The FCI can help inform macroprudential policy decisions, including decisions on setting the countercyclical capital buffer of Basel III.\n- The FCI signaled lax financial conditions in 2009 and again in 2012 that likely contributed to:\n  - accelerated credit growth in 2012–2013, and\n  - a subsequent acceleration in nonperforming loans during 2014–2016.\n- Historically, Mauritius has not experienced drastic swings in financial credit, making testing the constructed FCIs for predicting boom-bust episodes difficult."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Closely monitor domestic financial developments given strong macro-financial linkages.\n- Use the FCI alongside other indicators to inform macroprudential policy, particularly in evaluating the appropriate setting of the Basel III countercyclical capital buffer."
    },
    {
      "heading": "Limitations and analytical scope",
      "content": "- Limited historical variation in credit cycles in Mauritius constrains the ability to test FCI performance for boom-bust prediction.\n- Financial developments captured by the FCI extend beyond traditional monetary aggregates and interest rate measures.\n\n---\n\n Content in this bundle\n\n- Mauritius: Selected Issue; IMF Country Report No. 19/109; April 4, 2019\n  - Mauritius: Selected Issue; IMF Country Report No. 19/109; April 4, 2019 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Mauritius: Selected Issue; IMF Country Report No. 19/109; April 4, 2019 (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: April 29, 2019",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9781498311991.002",
    "Publication date: April 29, 2019",
    "This Selected Issues paper develops a Financial Conditions Index (FCI) for Mauritius—an instrument to gauge the operational state of the financial sector and predict real economy activity.",
    "The evolution of Mauritius’ financial services sector has been supported by a vibrant offshore corporate sector.",
    "Financial developments are broader than monetary developments depicting money supply and interest rates.",
    "The FCI is a robust predictor of real GDP growth in Mauritius.",
    "The FCI can help inform macroprudential policy decisions, including decisions on setting the countercyclical capital buffer of Basel III.",
    "The FCI signaled lax financial conditions in 2009 and again in 2012 that likely contributed to:",
    "Historically, Mauritius has not experienced drastic swings in financial credit, making testing the constructed FCIs for predicting boom-bust episodes difficult.",
    "Closely monitor domestic financial developments given strong macro-financial linkages.",
    "Use the FCI alongside other indicators to inform macroprudential policy, particularly in evaluating the appropriate setting of the Basel III countercyclical capital buffer.",
    "Limited historical variation in credit cycles in Mauritius constrains the ability to test FCI performance for boom-bust prediction.",
    "Financial developments captured by the FCI extend beyond traditional monetary aggregates and interest rate measures.",
    "**Mauritius: Selected Issue; IMF Country Report No. 19/109; April 4, 2019**"
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