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Overview

Located off the southeast coast of Africa, neighboring the French island of La Reunion, Mauritius is an island state of about 1.3 million people. The country’s economy has made great strides since independence in 1968 and is now classified as an Upper-Middle-Income economy. Key challenges include managing the transition to a knowledge-based economy and adapting to the impacts of climate change.

Political Context

Mauritius is a multi-party parliamentary democracy. Shifting coalitions are a feature of politics in the country. The President is the head of state, while the Prime Minister has full executive powers and heads the government. General elections were held November 7, 2019. The result was a victory for the Mauritian Alliance (a coalition of the Militant Socialist Movement (MSM), Muvman Liberater, Alan Ganoo Movement and Plateforme Militante), which won 42 of the 70 seats. Pravind Jugnauth of the MSM remained Prime Minister.

Recent Economic Developments

Mauritius became a High-Income Country in July 2020 based on 2019 data. However, it slipped back into Upper-Middle-Income status in 2021 due to the impact of the Covid-19 pandemic. Despite the successful handling of the public health emergency, the economic impact was severe and GDP contracted by 14.9 percent in 2020. An extensive state support package was effective in protecting livelihoods but came at high fiscal cost. Fiscal deficit escalated to 19.9 percent in FY20/21, and despite being partially financed through a 12.6 percent of GDP non-refundable Central Bank transfer, still caused public debt to spike to 100.6 percent of GDP. The effects of COVID-19 have reversed recent gains in poverty reduction and women’s labor force participation.

Real GDP grew by an estimated 3.9% in 2021, although subsequent COVID-19 waves dampened growth and output remains below pre-pandemic levels. A successful Covid-19 vaccination campaign resulting in 76 percent of the population being fully vaccinated by end-February 2022 has been a cornerstone of recovery. However, a large output gap remains in tourism, where arrivals decreased by 41.8 percent in 2021 compared to 2020. Even after full reopening of borders since October 1, monthly arrivals hovered below 50 percent of pre-pandemic figures. As imports grew faster than exports in 2021, the trade deficit widened by 39.4%, but the current account deficit still narrowed from 12.5 to 11.1% of GDP, aided by net income inflows. Headline inflation rose to 4% in 2021 from 2.5% in 2020, driven by external supply shocks resulting in higher freight, energy, and food prices. As oil prices rose to historical heights in the wake of the Russian invasion of Ukraine and ensuing sanctions on Russia, the Bank of Mauritius raised the Key Repo Rate 15 basis points to 2% from the historical low of 1.85 where it had been since April 2020, representing its first hike since June 2011. The removal of Mauritius from the FATF, UK and EU watchlists between October 2021 and January 2022 bolstered the financial sector, and following closing of the Mandatory Offer made by Airport Holdings Limited on October 15, 2021, the state-controlled entity expects to fully control Air Mauritius by end-March 2022. Poverty (Upper-Middle-Income Countries’ threshold of $5.5 a day 2011 PPP) fell from 18 to 10% between 2012 and 2019. However, given the dramatic contraction of GDP in 2020, poverty is estimated to have increased by over 5% points in 2020, subsequently dropping by over 1 point in 2021.​

Last Updated: Apr 13, 2022

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Mauritius: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments
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Additional Resources

Country Office Contacts

Main Office Contact
+230 203 2500
For general information and inquiries
Rafael Saute
Sr. External Affairs Officer
Maputo, Mozambique
+258-21-482-944
For project-related issues and complaints