Mauritius: Economist Intelligence Unit projects 3.7% growth rate in 2015
The EIU has projected a higher growth rate of 3.7% for Mauritius in 2015, provided the European economic recovery rate of 1.3% is sustained, while a lower growth rate will adversely influence the growth rate of the island economy as well. (Image:Composite)
The Economist Intelligence Unit has forecast growth in Mauritius for 2015 at 3.7% and 4% for 2016, in its country report for the island economy.
It is to be noted that the International Monetary Fund portrayed a growth rate of 3.5% for 2015 which is lower than the EIU’s estimates, whereas Statistics Mauritius forecast a growth rate of 4.1% and the Bank of Mauritius projected a 4.3% growth rate in 2015, exceeding EIU’s forecasts for Mauritius’ economic performance.
European countries continue to account for major exports of Mauritius, as well as serving as the main source markets for tourist. The EIU accredited the improved 3.7% growth rate forecast to the slow yet sustained recovery in Europe, which is expected to stimulate growth in Mauritius.
Accordingly, the efforts the island economy is making towards increasing its economic exposure to fast growing emerging markets horizon will also contribute towards the growth rate of 3.7%. This growth rate will be aided by a global economic recovery that is expected to further fuel the island economy in 2016, and beyond.
However, this will happen only if the European economic recovery rate of 1.3% is sustained, while a lower growth rate will adversely influence the Mauritian growth rate as well.
On budget deficit, the EIU highlighted that it will fall by approximately 3% of the Gross Domestic Product in 2019 on the back of faster economic expansion and a reduction in public expenditure. The deficit will be financed by internal credit, as well as by the banks and government bond issues, the EIU noted.
The EIU also considers that inflation should not be a concern in 2015, in spite of a rise in demand-side pressures and a relatively flexible monetary policy.
The weakening of the rupee with regard to the US dollar shall help lower inflation to 2.7% in 2015 against 3.2% in 2014.
Beyond 2015, the upward trend in global prices of raw materials resulting from the acceleration in world economic growth should change the situation where the inflation rate, according to the EIU, shall hit 4.1% in 2019.