Mauritius: IMF Forecasts Higher Growth Rate of 3.7% for Mauritius Despite Global Economic Slowdown

press release

The International Monetary Fund has forecasted a higher growth rate of 3.7% for Mauritius, confirming that the economy of Mauritius is quite resilient in spite of a general global economic slowdown.

The above statement was made by the Director of Africa Department, Mr. Abebe Selassie, on Tuesday 15 October 2019, during a meeting with the Mauritian delegation led by the Minister of Financial Services and Good Governance, Mr Dharmendar Sesungkur. The delegation comprising the Financial Secretary, Mr D. Manraj, the Governor of the Bank of Mauritius, Mr Y. Googoolye, the Deputy Financial Secretary, Mr G. Bussier, and the Senior Adviser (Economic Matters), Dr S. Narrainen, is actually in Washington in the context of the 2019 International Monetary Fund/World Bank Meeting. The Deputy Director for Africa, Mr David Owen, and the Mission Chief, Ms M. Qureshi, were also present at the meeting.

Mr Selassie also highlighted a general slowdown in the global economy as a result of the impact of the US-China trade war and Brexit. He recalled that, consequently, the IMF has cut its global growth forecast for 2019 to 3%. The Director of Africa Department congratulated Mauritius for its good socio-economic management especially regarding budget deficit, inflation and unemployment rate and stated that IMF will continue to provide its support for deepening the country's economic development and promote new initiatives in Africa. He further stated that Mauritius is a good example of resilient and performing economy.

During the meeting, the Mauritian delegation expounded that GDP grew at 3.8% in 2018 and that economic growth momentum remains strong. Growth is largely driven by robust performance of the financial services, construction, retail trade and ICT sectors. Growth in the financial services sector will remain above 5% in 2019, albeit slightly lower than in 2018. The global business sector has proven to be resilient in the face of the revised Double Taxation Avoidance Agreement with India.

The Mauritian delegation expressed confidence in the realisation of a growth rate between 3.7% and 3.9% for 2019 taking into account the mega infrastructure projects like the Metro Express Project which has already started and is expected to have a positive impact on economic activities in the months to come.

In addition, Mauritius has been proactive in the face of international challenges and will, this week, be the first African State to sign a comprehensive Free Trade Agreement (FTA) with China. The FTA will cover Trade in Goods, Intellectual Property, Electronic Commerce, Trade in Services, Investment and Economic Cooperation. On the economic cooperation chapter, Mauritius and China have agreed to collaborate in 10 areas, including industrial development to increase competitiveness; manufacturing based on innovation and research; exchange of specialists and researchers to disseminate know how and for support in technology and innovation, and the setting up of a Renminbi Clearing Centre in Mauritius, amongst others.

The IMF team was also informed that Mauritius has also signed the Eastern Southern Africa -United Kingdom ((ESA-UK) Agreement on 31 January 2019 and the instrument of ratification deposited on 21 February 2019. The ESA-UK Agreement contains three chapters namely Trade in goods, Fisheries and Development cooperation. Under Trade in goods, Mauritius has secured duty free quota free access on products, which are of key importance to our export sector and Mauritius' interest will thus be safeguarded.

The Agreement also contains provisions to engage into future negotiation with the UK on areas not currently covered by the iEPA including trade in services, investment, trade facilitation, competition policy, trade facilitation amongst others. The Agreement will enter into force once the UK moves out of the EU. It will provide predictability and legal certainty to Mauritian operators exporting to the UK, independent of any UK-EU BREXIT outcomes.

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