The MCCI presented its Economic Outlook for the Mauritian Economy for the years 2016 and 2017 on Monday 26th September 2016 in a press conference in the presence of the President of the MCCI, Mr. Azim Currimjee.
Since the beginning of 2016, Mauritius is faced with contradictory factors influencing the Mauritian economy.
With persistently low external demand, growing uncertainties on Brexit and global trade slowdown, the MCCI estimates growth in exports to be nil in 2016 and 2017. Furthermore consumption growth is forecast to remain low, at 2.7 percent in 2016 and 2017. With an increase in public investment in the next fiscal year, the MCCI forecasts a slower contraction in investment growth of 4 percent and 2 percent in the next two years.
The MCCI econometric model forecasts a recovery, albeit weaker than expected, in the economic growth rate at 3.4 percent and 3.7 percent in 2016 and 2017. Inflation is expected to remain low in the next two years, and unemployment rate will likely decrease to reach 7.7 percent by 2017, in light of budgetary measures to boost training and employment.
The MCCI further proposed a number of corrective measures for the Mauritian economy. Measures include a 100 point cut in the Repo rate, the introduction of negative income tax to support those at the lower end of the ladder, a review of income tax exemption thresholds, the opening up of Mauritius to retired foreigners, and the extension of VAT Refund Scheme for departing Mauritians.
Measures also include facilitation measures to reduce the cost of doing business, freight charges, as well as the introduction of an Innovation Box Regime and provision of a tax credit of 200 % for investment in R&D activities.
The full report can be accessed here.