Mauritius Economy

Why is Mauritius’ economy still going strong? It knows how to perfectly balance tourism, sugar and textiles! And when an economist says it’s going to “set sail”, he’s just talking about holidays on its beautiful beaches, nothing to worry about. How is Mauritius’ economy performing?

Recent Economic Growth in Mauritius

In 2023, the Mauritius economy recorded a solid growth of 7%, although lower than the 8.9% in 2022. The service sectors, particularly construction and tourism, were the drivers of this expansion. On the demand side, consumption and investment supported this performance. In 2024, GDP growth continues to remain at robust levels, with 6.4% in the first quarter and a stable forecast of 7.1% for the last two quarters of the year. Nominal GDP reached $14.4 billion in December 2023.

Sector Performance

Sector performance shows strong growth in several key sectors. Agriculture GDP jumped to €137.51 million in June 2024, while construction GDP rose to €270.14 million, up from €227.11 million previously. Manufacturing also posted a notable increase, reaching €342.85 million. The smaller mining sector saw its GDP increase to €11.72 million.

It should be noted that some sectors, such as transport (EUR 155.47 million) and utility services (EUR 50.54 million), have seen declines compared to previous periods.

Social and financial conditions

On the social front, the poverty rate fell to 13% in 2023, compared to 17% in 2020. Overall unemployment fell to 6.1%, but youth unemployment remains high at 17.3%. Inflation, for its part, has been reduced, to 10.8% in 2022, it stands at 7% in 2023. This is mainly due to a drop in commodity prices. The authorities have suspended the tightening of monetary policy, suggesting economic stability in the medium term.

Economic Outlook 2024-2025

Economic growth in Mauritius is projected to slow from 4.9% in 2024 to 3.7% in 2025, due to lower external demand for exports. Inflation, meanwhile, is projected at 5.8% in 2024, declining to 5% in 2025, mainly due to lower global commodity prices.

Fiscal Deficit and Current Account

The fiscal deficit is projected to narrow to 4.5% of GDP in 2024 and 4.3% in 2025, supported by higher tax revenues and effective expenditure management. Meanwhile, the current account deficit is also projected to narrow to 4.2% of GDP in 2024, before recovering slightly to 4.5% in 2025, largely driven by the strong performance of the tourism sector.

Growth prospects remain uncertain due to the lingering effects of the invasion of Ukraine, high debt, geopolitical tensions and climate change. In addition, a rapidly ageing population could increase fiscal pressures.