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.
Should UK and EU growth be weaker than we currently anticipate, Mauritius would see substantially slower growth than we currently forecast.
Learn how to effectively navigate the market research process to help guide your organization on the journey to success.Download eBook