Mauritius is an island state of about 1.26 million people (2022) located off the southeast coast of Africa and neighboring the French island of La R¨¦union. Mauritius is a beacon of economic success in Sub-Saharan Africa, having evolved from a low-income, sugarcane-dependent nation in the 1960s to an upper-middle-income country with a per capita income surpassing $10,000. This remarkable transformation was rooted in a stable democracy and a relatively diversified economy that now includes tourism, manufacturing, fisheries, ICT, and financial services, the latter contributing 40% of GDP. The country's proactive approach to education and infrastructure, as well as its openness to foreign investment, have fostered growth in various sectors, including a burgeoning pharmaceutical industry post-COVID-19. Despite the setback caused by the pandemic, which saw Mauritius¡¯s economy contract sharply and lose its high-income status, the government's robust support program and structural reforms have set the stage for a resilient recovery.
Political Context
Mauritius is one of the oldest democracies in Africa, having held 12 general elections deemed free and fair since the late 1960s. Its political system is dominated by three parties, namely the Militant Socialist Movement (MSM), the Labour Party, and the Mauritian Militant Movement (MMM). Of 12 general elections held so far, MSM has won six, the Labour Party won four, and the MMM won two. Shifting coalitions are a feature of politics in the country. The last general election took place in 2019. A coalition named Alliance Morisien won. The coalition comprises four parties: MSM, Muvman Liberater ML, Alan Ganoo Movement, and Plateforme Militante. The coalition won 42 of the 70 seats in the national parliament and formed the government with Pravind Jugnauth of MSA remaining the prime minister. In Mauritius, the president is the head of state, while the prime minister has full executive powers and heads the government. The next general elections are scheduled for November 2024.
Civil liberties. Mauritius is rated ¡°Free¡± in the 2023 Freedom House's annual study of political rights and civil liberties worldwide. It performs well on various other political and economic indicators compared to many countries in the region. It is also well placed in the Corruption Perceptions Index, ranked 55 out of 180 countries, up by one place since 2022.
Economic Developments and Forecast
Mauritius has experienced remarkable growth since independence in 1968, briefly reaching high-income country status in 2020. However, the global COVID-19 pandemic hit its economy hard. Despite a successful handling of the public health emergency, the pandemic¡¯s economic impact was severe, and the country¡¯s Gross Domestic Product (GDP) contracted by 14.6% in 2020, causing Mauritius to slide down to upper-middle-income country status. With a gross domestic product of $10,216 per capita (2022), Mauritius¡¯s economy has proven resilient to other global economic shocks, including those stemming from the war in Ukraine, which have affected revenues from tourism arrivals. GDP growth rebounded by a relatively modest 3.5% in 2021 and accelerated to 8.9% in 2022, supported by a strong recovery in tourism. In 2023, real GDP grew by 7%. The twelve-month average headline inflation moderated to 4.5% in June 2024, substantially slower than the 10.5% rate observed a year before, mainly due to lower global commodity prices. Strong GDP growth in the last two years also improved tax revenue and contributed to a lower public debt-to-GDP ratio of about 78%. While the public sector debt appears sustainable, a gradual fiscal consolidation is warranted to stabilize it.
The government has introduced measures to lessen labor and skills shortages and continues to promote the use of renewable energy. Strengthening resilience against climate and energy shocks and building fiscal buffers will be essential to build growth resilience. Investing in human capital and boosting private sector innovation will be crucial to regain and sustain high-income country status.
Last Updated: Oct 17, 2024
