Mauritian economy to expand 4.1% in 2015 on infra boost: Statistics Mauritius
The construction sector is expected to rebound by 3.3% — after four consecutive years of contraction — mainly boosted by ongoing public projects and private investment projects announced in Budget 2015 (Image: www.portstrategy.com)
The island economy is expected to expand by 4.1% in 2015 against 3.5% growth last year, said Statistics Mauritius on Tuesday, mainly on the back of heavy-duty infrastructure projects announced under Budget 2015.
Gross Domestic Product (GDP) growth will accelerate due to major public projects, with the construction sector expected to rebound by 3.3% in 2015 after four consecutive years of contraction, the statistics office said in a statement.
The economic and social indicators estimates by the statistic office depict a higher GDP for Mauritius in 2014 compared to 2013, with figures of 3.5% against 3.3% in 2013, driven mainly by financial and insurance activities”, “Manufacturing” and “Wholesale & retail trade; and “Repair of motor vehicles and motorcycles.”
For 2014, final consumption expenditure grew by 2.9% explained by higher government consumption expenditure. As for the Gross Domestic Savings as a percentage of GDP, it stood at 11.5% representing a slight decline compared to the 2013 growth of 11.8%.
However, for 2015, projections have been set for a robust growth rate of 3.2% for final consumption and 1.8% for Gross Domestic Savings.
On the investment side, figures are not favourable, with declining growth for total investment in 2014 by 6.6%. The private sector, which accounts for 74.4% of total investment in 2014, dipped by 8.4%, while public sector investment rebounded by 1.8%.
However, 2015 is expected to witness a turnaround in the investment cluster with budgetary measures expected to assist in a recovery of 6.7% against continued contraction over the past 4 years. The estimated investment rate will be 19.7%, spurred by investment channelled into “Building and construction work” by the private sector under the Integrated Resort Scheme (IRS). Besides, “Machinery and equipment” investment is forecast to rebound by 11.2% in 2015, mostly explained by expected power plant investments by CEB.
The net export segment also hit a positive note, with net imports increasing at a lower rate than in 2013 with 1.6% growth compared to 5.9% in 2013. This lowered growth rate of imports offset the reduced growth rate for exports in 2014 by 3.4% against 4.4% in 2013 resulting in trade deficit accounting for 9.5% of GDP in 2014, against a double digit 12.2% in 2013.
Going forward, 2015 is estimated to produce lower deficits which will account for only 8.5% of GDP upon increase in exports and contraction in the growth of imports that shall result in overall deficit of Rs 35.5 billion against R 36.5 billion in 2014.
An overview of sectoral contribution to the general growth rate of 4.1% in 2015 shows that information and technology industry will post growth of 7.0%, followed by the agriculture, forestry and fishing which will expand by 6.1%, manufacturing to grow by 2.5%, accommodation and food service activities shall further develop by 5.4%, and financial and insurance activities growth rate will remain constant at 5.4%.
There is good news for the construction sector which is expected to rebound by 3.3% — after four consecutive years of contraction — mainly boosted by ongoing public projects and private investment projects announced in Budget 2015 (such as Bagatelle water treatment and associated works, road improvement and upgrading, land drainage, replacement of water pipes, air and sea transport infrastructure at Agalega, IRS/RES and other private mega projects).
Finally, as per the national quarterly accounts released by Statistics Mauritius, it can be observed that production is relatively low in the first quarter; increases gradually in the two subsequent quarters to peak in the last quarter, and then declines in the first quarter of the following year. This pattern clearly indicates seasonality in the data.
Thus, lower GDP figures can be observed during the first quarter likely due to lower economic activity resulting from temporary closure of firms during the month of January because of New Year festivities.
On the other hand, the higher GDP figures during the last quarter could be explained by more activities in “Hotels and restaurants” due to high tourist arrivals, as well as in “Manufacturing” and “Wholesale and retail trade” segments to meet the high demand for consumption goods for end of year festivities.
Quarterly data series normally indicate that around 23% of the annual GDP was produced in the first quarter, 24% in the second quarter, 25% in the third quarter and 28% in the fourth quarter.