The island economy welcomed a delegation from the International Monetary Fund (IMF) to undertake the 2014 version of Article IV on Mauritius’ economic status.
Martin Petri and his team from IMF are visiting Mauritius to discuss the island economy with the Mauritian authorities and these discussions are expected to conclude by the end of the month. The report itself is likely to be finalized and published in two months.
The last IMF report on Article IV highlighted that in 2013, growth in Mauritius was relatively tough and was projected at 3.75 per cent.
It also stated that external shocks are the largest risk to the outlook but should be manageable with an appropriate policy response.
According to the IMF, global growth in 2014 should be slightly higher, approximately 3.7 per cent and in 2015 to 3.9 per cent.
The Debt Sustainability Analysis of the IMF is likely to reflect the fact that there has been an increase in the central government’s debt in 2013 when it amounted at 54.8%, compared to 53.1% in 2012.
The forecast of the IMF for 2018 is that Mauritius has the potential to meet its statutory debt ceiling target of less than 50 per cent of Gross Domestic Product.
Another subject which might be come forward is the rate of savings which continues to suffer from a free-fall.
As there is a narrow relationship between savings and growth, in 2013, Martin Petri underlined that a rate lower than 15 per cent was too low for a country like Mauritius and the island is likely to encounter difficulties in pulling up a plummeting savings rate.
The monetary policy of Mauritius will also be in the diary, and the point of view of the IMF on the excess of liquid assets of the banking cycle and the regular interventions of the World Bank on the foreign exchange market is awaited by numerous observers.
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