Mauritius Country Risk Report

Published 23 June 2015 | Quarterly

  • 30 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
Mauritius Country Risk Report

Core Views:

  • We forecast that real GDP growth in Mauritius will accelerate in 2015 and 2016, bolstered by falling oil prices, expansionary fiscal policy, and a recovery in investment. We forecast growth of 4.4% in 2015 and 4.8% in 2016, with a robust rate to continue over the medium term.

  • Risks to political stability should be limited in the short-term, as the recently-elected government overseas a period of accelerating economic activity.

  • The government is set to put an emphasis on spurring economic growth ahead of fiscal consolidation, meaning an increase in the budget deficit is likely in the short term. This is unlikely to pose a serious threat to broader economic stability in itself, though higher deficits and rising public debt will leave the country more vulnerable to external shocks of shifts in investor sentiment.

Major Forecast Changes

  • Our 2016 real GDP growth forecast has been upgraded from last quarter's projection of 4.2%, to 4.8%, as we expect the impact of fiscal stimulus and new investments to be felt.

  • We now expect the Bank of Mauritius to hold its Key Repo Rate (KRR) at 4.65% through to the end of 2015, as the need for monetary stimulus has diminished amid fiscal expansion and a rebound in inflation.

Risks To Outlook

  • While we expect the eurozone recovery to strengthen in 2015, a significant deterioration in conditions would pose notable risks to our growth outlook given Mauritius's exposure to the region. France in particular gives cause for concern given its macroeconomic weaknesses and political failure to deal with them.

  • A lower than expected growth outturn during 2015 would increase the likelihood of a rate cut by the central bank.

  • The recent uncovering of corruption scandals could harm the credibility of both the political class and the financial sector, both critical for the country's economic outlook.

Macroeconomic Forecasts (Mauritius 2013-2016)
Indicator 2013 2014e 2015f 2016f
Executive Summary
Core Views
Major Forecast Changes
Key Risks To Outlook
Chapter 1: Political Outlook
SWOT Analysis
BMI Political Risk Index
Domestic Politics
New Government Pursuing Populist Policies
The shock result in the snap elections held in Mauritius in December saw the electorate reject constitutional reform
While a new
government will not mean a radical departure from the previous political course, some new populist policies are being pursued
Chapter 2: Economic Outlook
SWOT Analysis
BMI Economic Risk Index
Economic Activity
Falling Oil, New Investment To Boost Real GDP Growth
Real GDP in Mauritius will accelerate to 4
This is an
upward revision from our previous forecast of 4
TABLE: Economic Activity
Monetary Policy
New Central Bank Governor Will Cut Rates
The Mauritian monetary policy committee will cut rates at its next meeting from 4
The removal of hawkish central bank
governor Rundheersing Bheenick and a disinflationary environment will enable the authorities to encourage economic growth by
governor Rundheersing Bheenick and a disinflationary environment will enable the authorities to encourage economic growth by
slashing the Key Repo Rate
TABLE: Monetary Policy
Balance Of Payments
Falling Oil Prices Will Bolster Current Account
Mauritius's current account deficit will shrink to 5
TABLE: Current Account
Fiscal Policy
New Mega-Projects Will Widen Budget Deficit
Mauritius' budget deficit will widen over the coming years, as the newly elected government pushes ahead with mega-projects
This is
no cause for alarm, given the expected fiscal benefits these developments will create
TABLE: Fiscal Policy
Chapter 3: 10-Year Forecast
The Mauritian Economy To 2024
Service Industries To Drive Long-Term Growth
Real GDP growth in Mauritius will be driven by the development of service industries over the coming decade
This will be powered by
government investment into the key sectors of tourism, medical tourism, education, banking, and shipping services
TABLE: Long-Term Macroeconomic Forecasts
mauritius Q2 2015
mauritius Q2 2015
Chapter 4: BMI Global Assumptions
Global Outlook
Weaker EMs To Weigh On Growth
Table: Global Assumptions
Table: Developed States, Real GDP Growth, %
Table: Em erging Markets , Real GDP Growth , %

The Mauritius Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Mauritius. It is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Mauritius's economic, political and financial prospects through end-2019, just published by award-winning forecasters, BMI Research.

Key Uses

  • Forecast the pace and stability of Mauritius's economic and industry growth through end-2019.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the operating environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Mauritius's country risks against regional peers using BMI's country comparative Risk Index system.
  • Evaluate external threats to doing business in Mauritius, including currency volatility, the commodity price boom and protectionist policies.

The Mauritius Country Risk Report by BMI Research includes three major sections: Economic Outlook, Political Outlook and Operational Risk.

Economic Outlook:

How will the Mauritius' economic policy-making and performance impact on corporate profitability over 2015-2019?

BMI provides our fully independent 5-year forecasts for Mauritius through end-2019 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Mauritius Country Risk Report features BMI's forecasts with supporting analysis for 2015 through to end-2019, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:


  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Index system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector obligations).
  • Global Assumptions - forecasts for each year to end-2019 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for Mauritius and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Mauritius, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Mauritius over the next 5-years?

BMI's Mauritius country Risk Index evaluates the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Mauritius Market - Political Strengths, Weaknesses, Opportunities and Threats facing Mauritius.
  • Political Stability and Risk Assessment - BMI's Risk Index assesses explicit short- and long-term risks to political stability; latest positioning and trends for Mauritius's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.
  • Long-Term Political Outlook BMI examines the structural risks to the stability of Mauritius’s political system and the dominant public policy issues likely to affect decision-makers, and outlines scenarios for how the state could evolve in the medium to long term.

Key Benefits

  • Benchmark Mauritius's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Operational Risk

What are the current operational risks and difficulties associated with doing business in Mauritius?

The Operational Risk section gives an evaluation of current risks and difficulties associated with operating in the market. It also provides a brief overview of the regional Operational Risk Index which benchmarks Mauritius against its neighbours.

Operational Risk Contents

The chapter provides a summary of the main threats in the country, within:

  • Labour Market Risk (Education; Availability of Labour; and Labour Costs)
  • Logistics Risk (Market Size and Utilities; Quality and Extent of the Transport Governance)
  • Trade and Investment Risk (Economic Openness; Government Intervention; and Legal Risks)
  • Crime and Security Risk (Crime; Terrorism; and Interstate Conflict risks).

The report also drills down in greater depth to address key issues in one of the following segments most critical to the market:

  • Transport network, economic openness, cost and availability of labour, crime risks, bureaucratic environment, market size and utilities, and interstate conflict.
  • Assess your company’s exposure to country specific operational and business risks, using BMI’s insight on the current dangers of operating in the market.
  • Evaluate Mauritius’s risk profile against its regional peers, helping you understand the market’s strengths and weaknesses in relation to other countries.

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