MCB Focus: Mauritius needs to implement the enabling institutional and economic policies to restore socio-economic growth
The report also emphasises on the economic perspective based on the international context, which has turned out to be increasingly unstable in recent months thereby amplifying uncertainty levels for Mauritian enterprises and the authorities in general. (Image: jfkoenig)
The MCB Group’s Focus edition noted that the performance of the Mauritian economy has in the recent past hindered by its inherent limitations, in spite the gradual headway to achieve economic diversification and international openness.
The following elements according to the MCB report hinder socio-economic development, the extensiveness and quality of public infrastructure levels in respect of areas such as energy, water, road network, seaport and telecommunications, the functioning of labour markets in tune with socio-economic exigencies and some other relatively underperforming areas of the business facilitation framework in response to the underlying competitiveness necessities of businesses.
The report also emphasises on the economic perspective based on the international context, which has turned out to be increasingly unstable in recent months thereby amplifying uncertainty levels for Mauritian enterprises and the authorities in general.
Moreover, MCB Focus analyses such circumstances to have contributed to an ever-uncertain global competitive landscape as regards the markets for goods, services and capital flow while concomitantly compounding the pressures linked to accelerating world trade liberalisation processes.
From an economic insight for the year 2014, the MCB foresee the GDP as basic prices being in line with the revised of 3.5% by the Statistics of Mauritius.
Thus, using the GDP at market price as per international standards for national data computation, the economic growth estimate for 2014 stands at 3.3%, while taking into account the key underpinning estimates such as lacklustre evolution of investment levels, with national investment plunging below the psychological threshold of 20% of GDP last year for the first time in 2 decades.
Mixed sectorial performances, spanning from notable growth in the financial intermediation, information and communication and tourism sectors, as well as modest progress of the export-oriented manufacturing industry and the agricultural sector to a downtrend trend in the construction industry are contributors to the current GDP stand.
As for unemployment, MCB estimate a nationwide relatively high rate of 7.8% for the third quarter of 2014.
However, the organisation analyses the deficiency of resources and intellectual capital as being the grounds of the indicated high of unemployment rate, which will according the MCB otherwise would have contributed in increasing GDP by a notable margin.
The outlook foresee the rate to remain unchanged in 2015, even though a relatively better outcome could be realised should extensive policy measures be promptly adopted to curtail labour market inadequacies and boost employment creation avenues across economic sectors, age groups and gender.
The MCB report, analyses the current 3.2% inflation rate which stood as at December 2014 to be the outcome of the consumer price index evolved at a tempered pace on recent times.
However, recent upward adjustments in household income levels, the generally subdued outlook for commodity prices in the context of the delicate economic context is set to remain a key determinant in engendering a further slide in the headline inflation rate further on.
As it is stated in the report the baseline estimate is that inflation would stand at close to the 2% mark as at end of 2015.
Accordingly, the prospects for inflation should, in the wake of the soft economic climate, provide a suitable backdrop for the maintenance of a generally accommodative monetary policy stance.
Finally, the MCB, proposes the implementation of enabling, policies to be revolve around, promoting efficient and well-functioning market mechanisms and removing market and price distortions, reinforcing the quality of the public institutional framework in order to promote efficient resource allocation and curtail wastage. Furthermore, widening our economic space by further diversifying export markets as well as exploiting opportunities such as additional linkages to global value chains and regional integration.