Mauritius business confidence rises on new markets focus
In good news for consumers, more than three quarters of the 81 firms polled said that they did not expect to raise their prices in the next quarter. (Image: IBL)
Business morale on the island economy is on an upswing as firms in Mauritius explore new markets, according to the latest business confidence survey by Mauritius Chamber of Commerce and Industry (MCCI).
The report, released on Monday, showed that firms, suffering from lower demand in their traditional market of Europe, have turned their attention to Africa and the Indian Ocean region. The focus on new markets appears to have boosted firms’ confidence for future prospects.
While confidence was still significantly below the 2010 base level of 100 points at 88 points, it was an improvement over the third quarter when it hit its lowest level in three years at 85.1 points.
In good news for consumers, more than three quarters of the 81 firms polled said that they did not expect to raise their prices in the next quarter.
Private sector firms anticipated inflation would be below 4.5 percent by June 2014, according to a survey of inflationary expectations released last week. Moreover, Statistics Mauritius data showed that inflation edged up to 3.5 percent in November, up from 3.4 percent in October.
And, it’s not just business morale but overall economic confidence that appears to be looking up. Bank of Mauritius, the central bank of the island economy, has forecast economic growth of between 3.8-4 percent next year, against an estimated 3.2 percent this year.
Growth is expected to be higher next year on the back of fresh business from the fast-growing African and Asian markets and a reduction in the traditional dependency on Europe, where countries continue to struggle amid a slower-than-expected recovery from recession.
Renganaden Padayachy, an economist at the chamber, told a news conference that the majority of entrepreneurs claimed to have strengthened their efforts towards new markets in the region and on the African continent to feed growth.
Additionally, easier access to private credit and improved trade logistics also helped boost confidence, the chamber noted.
Mauritius trimmed its key repo rate in June by 25 basis points to 4.65 percent.