On the onset, it can be said that Mauritius managed a decent economic performance in 2011, within an especially difficult environment with renewed fears of an impending recession on a global scale.

The continued uncertainty over the Euro Zone debt crisis, dwindling purchasing power in our major markets and low consumer demand are slowing the growth of the Mauritian economy. An overvalued currency is further eroding the ability of our entrepreneurs to face competition.

Private investment continues to fall, both in absolute terms and relative to total investment, signalling decreasing business confidence. The increase in current account deficit is also an issue that needs to be addressed. Some sectors of the economy, such as Hotels and restaurants and Manufacturing, are already starting to feel the strain.

It is unlikely that last year’s growth performance is matched in 2012, given international trends and the local situation. It is also unlikely that the growth figures fall to the level registered in 2009.

On the global scene, it appears that the recovery has stalled, and some economies are sliding back into a difficult period. The IMF and World Bank are expecting a marked slowdown in economic activity both in developed and emerging economies. The latter, however, are still expected to provide strong enough figures for growth to prevent a contraction in world output.

Until now, the local economy has remained fairly resilient to external shocks, mainly due to coordinated macroeconomic policies and institutional stability. However, as risks on our external markets are increasing, there is the need for more action on the part of policy makers not to just wade through the turmoil but to embark on an even higher path of post crisis sustainable development.