Mauritius Economy recovers from pitfalls of Covid-19: FM Renganaden Padayachy

Mauritius: The Mauritian economy has closed the gap of the COVID-19 crisis through the introduction of various measures and a people-centric approach to continue to protect the lives and livelihood of the population. This was the gist of the virtual intervention of the Minister of Finance, Economic Planning and Development, Dr Renganaden Padayachy, on 12 January 2023 at the Voice of Global South Summit in Indore, India.

Mauritius: The Mauritian economy has closed the gap of the COVID-19 crisis through the introduction of various measures and a people-centric approach to continue to protect the lives and livelihood of the population. This was the gist of the virtual intervention of the Minister of Finance, Economic Planning and Development, Dr Renganaden Padayachy, on 12 January 2023 at the Voice of Global South Summit in Indore, India.

The two-day Summit, held from 12 to 13 January 2023, focused on the theme ‘Financing a people-centric development’. Held in virtual mode, the Summit saw the participation of Leaders and Ministers from 125 countries of the Global South and focused international attention on priorities, perspectives and concerns of the developing world.

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In his intervention, the Finance Minister reiterated the full commitment of the Government of Mauritius to fight for a steady and inclusive development for all Mauritians. He also extended gratitude for the support provided by India for the socio-economic development of Mauritius.

Highlighting the country’s economic performance for the year 2022, he indicated that a Gross Domestic Product (GDP) growth of 7.8% and a Gross Value Added growth of 9.1% have been achieved. “For the year 2023, both the International Monetary Fund and the Ministry are forecasting a GDP growth above 5%”, he said. “We are reaching the record high of Mauritian Rs 110 billion for the year 2022, with Foreign Direct Investments at the historic level of Mauritian Rs 25 billion”, he indicated.

Minister Padayachy further underlined that the exports of goods would exceed Mauritian Rs 100 billion in 2022, representing a nominal growth of 22% compared to 2021. Prior to the crisis, he stated that exports of goods amounted to Mauritian Rs 78 billion in 2019.

Regarding the export of services, he pointed out that it will also register a record nominal growth of 65%, reaching Mauritian Rs 214 billion in 2022 from Mauritian Rs 129 billion in 2021. The Minister observed that the public debt to GDP is reducing at a high pace, coming from 96,1% in June 2021 to 84% in December 2022”. “Our objective is now to reach a debt ratio of 78% by June 2023”, he added.

Speaking on governmental initiatives for the benefit of Mauritian households in the current context of rising inflation and a higher cost of living, he dwelt on the introduction of monthly financial support in the Budget 2022-2023 effective since July 2022 and being paid to more than 50 % of the population, including the elderly, the disabled and low-income workers and the middle class.

Highlighting the concrete shields put in place by Government against poverty, he mentioned the tripling of the basic pension and the introduction of the minimum wage and negative income tax since 2015. Other measures elaborated by Minister Padayachy to avoid economic and social chaos in the face of COVID-19 include the introduction of the Wage Assistance Scheme and the Self-Employed Assistance Scheme and the prevention of massive lay-offs across different sectors of the economy.

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Dr Padayachy listed other measures that have been introduced, with the support of the Bank of Mauritius and the Development Bank of Mauritius, to provide financial assistance to local businesses, including small and medium enterprises, in view to preserve the financial and economic architecture of the country. According to the World Bank, he said, “Mauritius has deployed the 4th largest response to the Covid-19 crisis in the world, representing 32% of our GDP”. The role played by the Bank of Mauritius in the creation of the Mauritius Investment Corporation, with a capital of USD 2 billion, to maintain the financial and economic stability of the country was also highlighted by the Finance Minister.

Underlining the globally unexpected health, economic and geopolitical challenges that have pushed development to the back burner, he called upon Finance Ministers to put development at the forefront of the agenda, adding that it is not only a necessity but the only way to strengthen resilience to future shocks. “Reducing inequality and poverty has a significant and positive impact on growth and ultimately on the development of our people”, added Dr Padayachy.