IMF Mission: Mauritian economy remains resilient with 3.2% growth in 2025

“The Mauritian economy has exhibited resilience, recording growth of 3.2 percent in 2025 and easing inflation in early 2026. However, the near‑term outlook has weakened amid heightened global uncertainty and ongoing conflict in the Middle East,” said the International Monetary Fund (IMF) Mission Chief, Ms Mariana Colacelli, yesterday during a press conference at the Hennessy Park Hotel in Ebène.

She conveyed the preliminary findings of the mission undertaken by an IMF team, which she led, to Mauritius from 22 April to 4 May 2026 as part of discussions for the 2026 Article IV Consultation. Under Article IV of the IMF’s Articles of Agreement, the Fund conducts regular—typically annual—bilateral consultations with its member countries. A staff team visits the country, collects economic and financial information, and discusses with national authorities on recent developments and policy directions. The findings are subsequently compiled into a report, which serves as the basis for deliberations by the IMF Executive Board.

Ms Colacelli highlighted that Mauritius needs to advance reforms to rebuild fiscal space, while strengthening the monetary policy framework and enhancing the monitoring of macro-financial risks to safeguard financial stability. She also said that reforms to boost productivity, support private investment, and strengthen climate resilience are critical to sustain growth amid demographic headwinds and to help reduce external imbalances.

Speaking on the Mauritian economy, she noted that it has remained resilient. Real GDP grew by 3.2 percent in 2025, driven by continued strength in services—including tourism and financial services—and moderated by a contraction in construction. Growth is projected to slow further in 2026 to 2.8 percent, due to adverse spillovers from the war in the Middle East, particularly affecting the tourism sector, she added.

She indicated that inflation picked up in 2025, partly reflecting policy-related price adjustments, before easing in early 2026 to within the Bank of Mauritius’ (BOM) target range of 2 to 5 percent. Inflation is nevertheless expected to rise again in 2026, driven by higher global fuel and food prices, before stabilising in 2027.

On the external front, the current account deficit is estimated to have widened in 2025, while foreign reserves increased to US$10.3 billion by year-end. Ms Colacelli cautioned that prolonged global economic challenges, including continued geopolitical tensions, could further weigh on growth, intensify inflationary pressures, and weaken the country’s external position.

Policy discussions during the mission focused on addressing the economic impact of the Middle East conflict, rebuilding fiscal space, strengthening the monetary policy framework, and maintaining financial stability. The fiscal position is expected to improve in the 2025–2026 financial year, with the primary deficit projected to narrow to 3.5 percent of GDP, down from 6.5 percent in the previous fiscal year.

Public debt, however, is projected to remain high at around 88 percent of GDP by end-June 2026. Ms Colacelli emphasised the need for continued fiscal consolidation through enhanced revenue mobilisation and prudent spending, particularly in areas such as pensions and extra-budgetary transfers, while ensuring targeted support for vulnerable groups.

Regarding monetary policy, she described the current stance as broadly appropriate, stressing the importance of maintaining a forward-looking approach. The BOM should be ready to tighten policy if inflationary pressures exceed target levels, while reforms to strengthen the monetary policy framework and safeguard central bank independence should be pursued promptly.

She also welcomed the BOM’s decision to promptly return undisbursed funds from the Mauritius Investment Corporation (MIC) to the central bank, as well as plans to gradually phase out the remaining BOM investment in the MIC.

Ms Colacelli further underscored the importance of structural reforms aimed at enhancing competitiveness, boosting labour supply and skills, encouraging private investment, and strengthening climate resilience. These measures, alongside improved governance and continued adherence to Anti-Money Laundering and Countering the Financing of Terrorism standards, are key to sustaining long-term growth and reducing economic imbalances.

Finally, she commended the Government’s commitment to data quality and transparency, noting that Mauritius has become the first African country to subscribe to the IMF’s Special Data Dissemination Standard Plus, the highest tier of its data standards framework. Authorities have also expressed commitment to further strengthening institutional independence and the national statistical system, she said.

05 May 2026

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Topics: Finance