On 22 April 2019, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Mauritius.
The IMF Board noted, in its communique that the Mauritian economy continues to grow at a steady pace, benefiting from a vibrant services sector and strong domestic demand, with a Real GDP Growth rate estimated at 3.8 percent in 2017 and 2018. The IMF assessed that the inflationary pressures are contained, and the unemployment rate has fallen to about 6.9 percent. International reserves have improved significantly since 2016, supported by continued financial inflows. Monetary policy remains accommodative, while the fiscal stance continues to be expansionary. On the downside, the Board noted that the external balance continues to deteriorate due to a rising trade deficit in goods, but the overall balance of payments remains in surplus.
Going forward, the growth momentum is expected to continue. Real GDP growth is projected at about 4 percent in the medium term. The IMF however raised concern that, without fiscal consolidation, the authorities’ debt target of 60 percent of GDP by FY2020/21 is unlikely to be met.
The IMF Article IV Executive Board Assessment follows the IMF Staff consultations in Mauritius. On the 25th of January 2019, the IMF Staff, led by Mrs Mahvash Qureshi held a working session with the Secretary-General of the MCCI to discuss on the private sector’s macro-economic stance of the country.
The IMF Staff Report is available here.