Economic Impact of the Pandemic and Policy Responses. Mauritius has been successful in containing the COVID-19 pandemic thanks to strict health measures but the halt in tourism has significantly affected its tourism-dependent economy. A comprehensive set of stimulus measures to mitigate the economic impact of the pandemic, including a wage subsidy and income support for the self-employed, have provided support to firms and households.
1. In the run-up to pandemic, Mauritius’ economic performance was solid. Although public debt was increasing, the economy was expanding steadily at around 3 percent a year. The current account deficit was expected to widen in the near term before stabilizing at about 5 percent of GDP. International reserves had grown in recent years and were assessed to be adequate. Credit to the private sector was healthy and the banking sector well-capitalized. However, the fiscal stance was expansionary, and public debt was above the authorities’ 60 percent of GDP target and rising.
1. On behalf of the Mauritian authorities, we would like to thank Management and staff for the candid and constructive dialogue during the discussions under the 2021 Article IV consultation. The authorities share the view that the staff report provides a fair assessment of the macroeconomic challenges posed by the Covid-19 pandemic as well as the policy response undertaken. They broadly agree with the analysis and recommendations put forward and will take them into consideration when implementing their strategy to restore sustainable growth, address pre-existing bottlenecks to bolster resilience and competitiveness and carry on the structural transformation of the economy.