Mauritius showed slow economic growth owing to the deteriorating external economic environment, particularly of the sugar and textile sectors. Executive Directors urged the authorities to develop a comprehensive economic strategy that combines structural reform measures and policies geared toward macroeconomic stability. They commended the financial sector reform and the implementation of Financial Sector Assessment Program recommendations, welcomed the financial sector monitoring and tax reforms plans and emphasized the need for strong exchange rate and monetary policies for securing external competitiveness.
This Selected Issues paper assesses the external competitiveness of Mauritius over the period 1980–2007, with particular attention to the most recent years. The paper estimates the equilibrium real exchange rate using the macroeconomic balance approach, the single-equation equilibrium exchange rate approach, and the capital-enhanced equilibrium exchange rate approach. A wealth of structural competitiveness indicators are also analyzed. The findings indicate that the real exchange rate at the end of 2007 was broadly in line with its equilibrium value.
Over the past two decades, wide-ranging structural reforms, supported by prudent policies, have established Mauritius as a top regional performer. The Mauritian economy recovered in 2010. Real GDP growth is estimated to have accelerated to 4 percent (3 percent in 2009), driven by strong growth in fishing, ICT, and financial industries. Against the backdrop of the European debt crisis and a depreciating Euro in mid-2010, the government adopted a second stimulus package. Fiscal policy was less expansionary than originally envisaged.
This Selected Issues paper focuses on the prospects of growth in São Tomé and Príncipe (STP). This case study seeks explanations for STP’s relative under-performance and draws lessons for the future. It compares past economic developments in the islands and recommends policies that could most effectively foster future growth in STP. Country-specific characteristics as well as weak institutions contributed to STP’s relative underperformance since independence. Initial conditions, particularly regarding human capital and natural resources, contributed to STP’s relative underperformance, especially in the first decade after independence. Experience in the four island-states suggests that fiscal discipline, revenue mobilization, and a more active private sector, particularly in the tourism sector, may be key to tap STP’s growth potential. Fiscal discipline is needed to contain the fiscal deficit and bring the debt to a sustainable level. Continuing to strengthen public financial management, including implementing multiannual fiscal framework as recommended by the IMF technical assistance, would help.
This 2017 Article IV Consultation highlights that the international reserve buffers have improved substantially in Mauritius. The government intends to pursue an ambitious growth strategy anchored on significant public investments in infrastructure and improvements in the business environment. Growth is projected at 3.9 percent in 2017, and about 4.0 percent over the medium term. The authorities have taken steps to mitigate financial stability risks and are well-advanced in modernizing financial sector regulation. However, the vibrant Global Business Sector faces pressure from international anti-tax avoidance initiatives. Fiscal space is limited, fiscal risks are increasing, and there are signs of building inflationary pressures.
This paper discusses initial performance of the Southern African Development Community’s (SADC) Macroeconomic Convergence Program. The SADC’s regional economic integration agenda includes a macroeconomic convergence program, intended to achieve and maintain macroeconomic stability in the region, thereby contributing to faster economic growth and laying the basis for eventual monetary union. As macroeconomic performance in the SADC region has improved in recent years, most countries are making progress toward, and in many cases exceeding, the convergence criteria. Most SADC member states have recorded solid macroeconomic performance in recent years, in general coming close too, and in many cases surpassing, the convergence targets specified for 2008. A notable exception in this regard is Zimbabwe, which was in the grip of hyperinflation. The macroeconomic targets for later years are ambitious and, in some cases, warrant further evaluation, given that achieving the targets may be neither necessary nor enough to achieve good macroeconomic results.
International Monetary Fund. External Relations Dept.
La inflación, Programa de trabajo del FMI, El precio de las materias primas, Impacto en África, Qué empuja el petróleo al alza, Reunión petrolera de Yeddah, Entrevista sobre Haití, El fondo soberano de Noruega, México, La política monetaria de Suiza, Mauricio, Notas breves