## Mauritius: Selected Issues

_IMF Staff Country Reports, April 29, 2019_

## Source details

**Canonical URL:** [Mauritius: Selected Issues](https://www.imf.org/en/publications/cr/issues/2019/04/29/mauritius-selected-issue-46831)

## Other formats

- [Markdown version](/en/publications/cr/issues/2019/04/29/mauritius-selected-issue-46831/index.md)
- [Structured JSON version](/en/publications/cr/issues/2019/04/29/mauritius-selected-issue-46831/index.json)
- [Bundle manifest](/en/publications/cr/issues/2019/04/29/mauritius-selected-issue-46831/bundle-manifest.json)

## Bibliographic details
- Published: April 29, 2019
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781498311991.002

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### Overview
- 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.

### Key findings
- 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:
  - accelerated credit growth in 2012–2013, and
  - a subsequent acceleration in nonperforming loans during 2014–2016.
- Historically, Mauritius has not experienced drastic swings in financial credit, making testing the constructed FCIs for predicting boom-bust episodes difficult.

### Policy implications and recommendations
- 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.

### Limitations and analytical scope
- 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.

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## Content in this bundle

- **Mauritius: Selected Issue; IMF Country Report No. 19/109; April 4, 2019**
  - [Mauritius: Selected Issue; IMF Country Report No. 19/109; April 4, 2019 (Markdown version)](/-/media/files/publications/cr/2019/1musea2019002.pdf.md){rel="alternate" type="text/markdown"}
  - [Mauritius: Selected Issue; IMF Country Report No. 19/109; April 4, 2019 (PDF)](/-/media/files/publications/cr/2019/1musea2019002.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2019/04/29/mauritius-selected-issue-46831_