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Select Economic and Financial Indicators2014201520162017e2018f
Real GDP (% change)3.63.53.93.94.0
GDP (USD bn)12.611.512.212.312.9
Inflation (average)3.21.31.03.75.0
Fiscal Balance (% GDP)-3.2-3.6-3.7-3.4-3.2
Broad Money (% change, end period)8.710.29.14.97.0
Population (mn)1.261.261.261.271.27
Exports (USD bn)6.35.55.25.45.7
Imports (USD bn)7.96.86.57.07.4
Current Account Balance (% GDP)-5.7-4.9-4.4-5.8-6.2
FX Reserves (USD bn, end period)4.64.44.65.05.1
Exchange Rate (average)30.6535.1335.5534.5934.06
Sources: IMF, World Bank, UN, Bloomberg, Ecobank Research

Economic Outlook

Economic Outlook

Real GDP: The government’s fiscal stimulus plans are expected to help to continue supporting growth of about 4% in 2018. As part of its Three-Year Strategic Plan 2017/18-2019/20, and Public Sector Investment Programme 2017/18-2021/22, the government of Prime Minister Pravind Jugnauth follows the stimulus-minded approach to fiscal policy adopted by previous Prime Minister Anerood Jugnauth before his resignation in January 2017. Alongside government investment drives, growth is likely to be supported by a recovery in exports, including rising tourist arrivals and tourism revenue.

Inflation: is forecast to quicken in 2018 to around 5%, from 3.7% in 2017, as increased government spending stimulates economic activity, and higher global oil prices raise domestic fuel prices.

Fiscal balance: The budget deficit is forecast to narrow somewhat over the outlook period, as the government seeks to rationalise spending with a particular focus on overturning the recurrent deficit by the 2019/20 fiscal year. However, fiscal pressures will remain as the government advances with its infrastructure spending plans. Planned capital expenditure for the 2017/18 fiscal year is 82.5% higher than its 2016/17 outturn, with part of the spending going towards the construction of the Metro Express light rail transit system, which commenced in September 2017. Nonetheless, the course of GDP growth in 2018 will play an important part in determining the country’s success in reducing the overall deficit.

Current account: deficit is forecast to widen in 2017, due to increasing import demand. This is despite the expectation that a recovery in export revenues will continue in 2018 (following a decline of 5% in 2016, and a 4% rebound in 2017); tourist arrivals grew by 5.2% in 2017. With the government’s infrastructure drive, we expect the current deficit to weaken beyond 6% of GDP in 2018, before narrowing somewhat in 2018. Increased funding from the Indian government, to support Mauritius’ infrastructural spending, will help to keep this from widening further.

Risks

Mauritius’ main fiscal challenge will be to maintain momentum in diversifying the economy and enhancing productivity by investing in physical and human capital in a growth-constrained economic environment.

FX, FI and Commodity Information

FX, FI and Commodity Information

Exchange rate structure

RegimeFloating
TargetNo target, but the central bank intervenes occasionally to smooth excess volatility.
Type of interventionVia spot market
Convertible currency?No
Market participantsn/a
Source: Bloomberg, IMF, and Ecobank Research

FX

FX ProductsSpotForwardsNon-deliverable ForwardsOptionsSwaps
On offerYesYes – up to 5 monthsNoNoYes
Daily trading volume (USD mn)n/a
Average trade size (USD mn)
Average spread
Trading hours24 hours
Settlement cycleT+2T+Tenor+2n/aT+2
FX Market StructureSpots, forwards and FX swap markets have reasonable  average single transaction and overall daily turnover sizes. Liquidity out to one year is present for all swaps, although their spreads are relatively high.
Non-resident FX RegulationsSpotForwardsNon-deliverable ForwardsOptionsSwaps
Trade and FDI flowNo restrictionsn/a
Financial flow
Resident FX RegulationsSpotForwardsNon-deliverable ForwardsOptionsSwaps
Trade and FDI flowNo restrictionsn/a
Financial flow
Source: Bloomberg, IMF, and Ecobank Research

FI

Primary MarketTreasury billsTreasury notesTreasury bondsCentral Bank billsOMOs
IssuerGovernmentCentral Bankn/a
End useGovernment financingGovernment financingGovernment & infrastructure financingLiquidity management
Maturity structure91- to 364-days2- to 4-yrs5- to 20-yrs2- to 4-yrs
CouponZeroFixedFixed / FloatingFixed
Coupon paymentsn/aSemi-annualSemi-annualSemi-annual
Secondary Market
Daily trading volumeLimited tradingn/a
Average trade sizeLimited trading
Settlement cycleT+2
Nedbank contact details for Mauritius – please contact Head Office:
135 Rivonia Road, Sandown, Sandton 2196, Johannesburg, South Africa
P.O. Box 1144, Johannesburg 2000, South Africa
Tel: +27 11 294 4444
Source: Bloomberg, IMF, and Ecobank Research

FI primary market information

FI primary market information

Mauritius Debt2014201520162017e2018f
Government debt (% GDP)57.562.361.559.960.7
Sub-Sahara average44.552.656.155.655.8
External debt (official creditors, % GDP)15.716.314.713.111.9
Sub-Sahara average25.530.231.932.933.2
External public debt stock (USD bn)2.01.91.81.61.5
Share of total sub-Sahara debt (%)0.80.70.60.50.4
Source: IMF and World Bank

Commodity and trade information

Commodity and trade information

Hydrocarbon & mineral production

Given the country’s tiny size, Mauritius has no formal mining sector, although there is small-scale production of basalt, lime and salt. Mauritius has no known oil or gas reserves and must import all its refined products. Mauritius consumes around 250,000 tonnes of refined product annually, all of which are imported from India.

Soft commodity production

Despite the country’s small size, Mauritius is an important sugar producer with estimated output of 360,000 tonnes in 2017. Following the end of preferential access to the EU for raw sugar, the country’s sugar sector underwent massive restructuring in a bid to boost its competitiveness; it now exports refined white sugar and molasses to the EU. Although the restructuring led to a decrease in both the area planted with sugarcane and also output, the country’s sugar millers, led by Alteo and Omnicane, have diversified into sugar by-products and co-generation. The country’s other agricultural production is on a small scale, led by pumpkins (19,000 tonnes in 2016), potatoes (17,000 tonnes), tomatoes (10,000 tonnes) and tea (7,300 tonnes). Mauritius is also an important producer of fish, with annual output of around 15,000 tonnes.

Trade flows

Imports

Mauritius’s total imports were US$4.4bn in 2017. As the country has no refining capacity and supplies shipping in the Indian Ocean (‘bunkering’), Mauritius is reliant on imports of petroleum products, worth US$470mn in 2017, most of which come from India. Mauritius is also dependent on imports of capital goods and industrial raw materials, importing US$1.2bn worth of machinery, vehicles, aircraft & electronics, US$128mn of plastics and US$126mn of iron & steel in 2017. As Mauritius does not produce cotton, it needs to import cotton fibre for its textile sector, with imports worth US$121mn in 2017. That year the country also imported US$75mn worth of rough diamonds for its polishing and cutting industry. Mauritius is dependent on food imports, including meat & fish (worth US$240mn) and cereals, flour & dairy products (US$228mn).

Exports

Mauritius’s exports totalled US$2.3bn in 2017. Textiles & cotton were the country’s largest export, totalling US$727mn, of which the majority went to the EU, the USA and South Africa, reflecting the island’s preferential trade agreements. Textiles have eclipsed Mauritius’ traditional agricultural exports, which are led by meat & fish (US$399mn in 2017) and sugar (US$295mn), most of which is exported to the EU under preferential trade terms. Mauritius also exports diamonds and jewellery (worth US$157mn), and is a re-export hub for petroleum products (worth US$163mn) and electronics (US$57mn).

  • Flag
  • Population
    1.27 M
  • Area
    2,040 sq km
  • Capital
    Port Louis
  • Largest city
    Port Louis
  • Official language
    English
  • Major languages
    English, French, Creole and Bhojpuri
  • Currency
    Mauritian rupee

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