Economic Growth Projected to be Over 4% in 2011

The Mauritian economy has performed better than expected with an increase of 4 percent in real growth at market prices in 2010, according to a statement released in Port Louis on February 2 by an International Monetary Fund (IMF) mission. The statement highlights the prompt and comprehensive policy response of the Mauritian authorities to the global crisis over the period 2008-2010.

The IMF mission led by Mr Martin Petri was in Mauritius from January 19 to February 2 for consultations. The delegation met the Vice-Prime Minister and Minister of Finance and Economic Development, Mr Pravind Jugnauth; the Governor of the Bank of Mauritius, Mr Rundeersing Bheenick and senior government officials; members of the National Assembly as well as representatives of the private sector and the civil society.

“Taking into account the expected upturn in the world economy and the continuing effects of the fiscal stimulus, economic growth is projected to increase to more than 4 percent in 2011”, says the IMF.

The IMF mission further observes that the challenge lying ahead of Mauritius will be to accelerate growth through increased public and private investment and productivity advances while continuing medium-term fiscal consolidation to reduce economic vulnerabilities.

According to forecasts, inflation is expected to be 5, 5% in 2011.The overall fiscal balance including net lending is projected to increase mainly on account of capital investment, net lending to public enterprises and spending from special funds as compared to 2010.

The statement points out that though Mauritius is a pioneer in the development of green taxes, more can be done as regards tax policy including a review of vehicle taxation to increase incentives to reduce emissions and congestion. An explicit carbon tax is also recommended to improve climate policy.

With a view to raising competiveness in Mauritius, in addition to welcoming the structural reforms, the mission highlighted that reforms should be maintained to reduce critical structural bottlenecks in infrastructure and the parastatal sector as well as supporting export-oriented SMEs in launching new products and services so as to further strengthen the country's ability to compete in the world.