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Mauritius Country Risk Report Q4 2018

Mauritius Country Risk Report Q4 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 towards 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 government efforts so support low-income workers and the relatively robust institutions and rule of law. Mauritius may face some moderate political risks if the government is perceived to give Chinese investment an insufficient degree of scrutiny as part of free trade negotiations.

The Bank of Mauritius 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 to support growth.Major Forecast Changes

We have revised our forecast for real GDP growth in 2018 up from 3.6% to 3.7% on the back of further investment in construction, announced in the FY2018/19 budget, which will add further tailwinds to this already-thriving sector.

Key Risks



Should UK and EU growth be weaker than we currently anticipate, Mauritius would see substantially slower growth than we currently forecast.


Executive Summary
Core Views
Major Forecast Changes
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Mauritian Short-Term Growth To Decelerate On Weaker Sugar Output
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
Direct Investment Will Comfortably Fund Wider Mauritian Current Account Deficit
Outlook On External Position
TABLE: CAPITAL AND FINANCIAL ACCOUNT BALANCE
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
TABLE: TOP FIVE GOODS IMPORTS 2017
TABLE: TOP FIVE GOODS EXPORTS 2017
Monetary Policy
Bank Of Mauritius To Hold Rates In 2018, Cut In 2019
Monetary Policy Framework
TABLE: MONETARY POLICY FORECASTS
Fiscal Policy And Public Debt Outlook
Mauritian Fiscal Deficits To Be Widened By Higher Expenditure
TABLE: RECURRENT EXPENDITURE PROJECTIONS IN FY2018/19 BUDGET, (MURBN, UNLESS OTHERWISE SPECIFIED)
Mauritius Country Risk Q4 2018ContentsStructural Fiscal Position
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES, FY 2017/18
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
10-Year Forecast
The Mauritian Economy To 2027
Service Industries To Drive Long-Term Growth
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Political Outlook
Domestic Politics
Free Trade Negotiations With China Could Create Political Headwinds In Mauritius
Global Macro Outlook
Fewer Negative Surprises, But Trade Risks Rising
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: MAURITIUS – MACROECONOMIC DATA AND FORECASTS

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