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Mauritius Country Risk Report Q3 2018

Mauritius Country Risk Report Q3 2018

We forecast modest real GDP growth in Mauritius over the coming years, as we expect that relatively sluggish demand in key export markets and amendments to Mauritius' tax treaty with India will weigh on the finance, tourism and manufacturing sectors, although construction will grow strongly. From 2020 onwards, we expect growth to accelerate as Mauritius completes its transition to being a major transhipment hub on the China-Africa trade axis, boosting the services sector considerably.

Political risk will remain relatively subdued in Mauritius, due to govern-ment efforts to support low-income workers and the relatively robust institutions and rule of law. While Mauritius will remain among the most politically stable markets in Sub-Saharan Africa, a series of corruption scandals have some potential to undermine the legitimacy of the government, but we believe this will be a relatively limited risk.

The Bank of Mauritius (BoM) will hold its key policy rate at 3.50% in 2018, as credit growth and inflation both edge higher. In 2019, growing headwinds to loan growth and an abatement in inflationary pressure will result in a modest cut of 50 basis points.


Executive Summary
Core Views
Major Forecast Changes
Key Risks
Chapter 1: Economic Outlook
SWOT Analysis
BMI Economic Risk Index
Economic Growth Outlook
Long-Term Growth Outlook Positive, Despite Short-Term Headwinds
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
External Trade And Investment Outlook
Robust Investment To Sustain Wider Current Account Deficit
Outlook On External Position
TABLE: CAPITAL AND FINANCIAL ACCOUNT BALANCE
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
TABLE: TOP 5 GOODS IMPORTS 2016
TABLE: TOP 5 GOODS EXPORTS 2016
Monetary Policy
Bank Of Mauritius To Cut In 2019
Monetary Policy Framework
TABLE: MONETARY POLICY FORECASTS
Fiscal Policy And Public Debt Outlook
Recurrent Expenditure To Be Structurally Higher
Structural Fiscal Position
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES, FY 2017/18
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
Chapter 2: 10-Year Forecast
The Mauritian Economy To 2027
Service Industries To Drive Long-Term Growth
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Chapter 3: Political Outlook
SWOT Analysis
BMI Political Risk Index
Domestic Politics
Expenses Scandal And Inflation Spike Pose Little Threat To Political Stability
Chapter 4: BMI Global Macro Outlook
Signs Of Weakness, But Global Expansion Broadening
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
TABLE: MAURITIUS – MACROECONOMIC DATA & FORECASTS

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