Growth to Rebound in Mauritius in the period of Post-Crisis

In the period of post-crisis, Mauritius will have more access to and will emerge into the European markets and though the pick-up may be slow, growth will rebound in the year 2011 and 2012. This is one of the observations made by World Bank experts regarding the World Bank's Global Economic Prospects 2011, released on 13 January.

The Global Economic Prospects 2011 report examines growth trends for the global economy and how they affect developing countries. It includes three-year forecasts for the global economy and long-term global scenarios for the ten years.

According to the report, Gross Domestic Product (GDP) growth in Mauritius reached 4.2% in 2010 as compared to 3.1% in 2009. Growth in 2010 has been supported by the recovery in Europe and the United States which accounts for some 70 percent of textile and sugar exports as well as the major source destination of tourists. Furthermore, the offshore financial services sector also provided support to growth on the back of rapid growth in India, as the sector is a major means of foreign investment into India.

The report also states that growth in Sub-Saharan Africa rebounded strongly in 2010. GDP in Sub-Saharan Africa is estimated to have expanded by 4.7% in 2010 from a growth of 1.3% recorded in 2009. However, the slower growth rate in the region's largest economy South Africa (2.7%) dragged overall growth in Sub-Saharan Africa.

According to the World Bank which says that most developing countries have recovered from the crisis, the world economy is moving from a post-crisis bounce-back phase of the recovery to slower but still solid growth this year and in 2012, with developing countries contributing almost half of global growth. Based on the report, it is expected that the global GDP which expanded by 3.9% in 2010, will slow to 3.3% in 2011, before reaching 3.6% in 2012. Developing countries are expected to grow 7% in 2010, 6% in 2011 and 6.1% in 2012.

The report also points out that net international equity and bond flows to developing countries rose sharply in 2010, rising by 42% and 30% respectively, with nine countries receiving the bulk of the increase in inflows. Foreign direct investment to developing countries rose to 16% in 2010 reaching $410 billion after falling 40% in 2009. An important part of the rebound is also due to rising South-South investments, particularly originating in Asia. Current high food prices are also having a mixed impact in many economies, in addition to dollar depreciation, added the report.