By
Vishal Bhidu
The SBM Insights issued in October 2025 has remarked that the quarterly real GDP Growth stood at 4.1 percent and 3.6 percent during the first and second quarters of 2025, respectively showcasing resilience in the face of continued challenges while at the same time, growth forecast will be at 3.2 percent for the year, aligned with the Central Bank positioning itself between the lower range of 3-3.5 percent.
The bank remarked that in a context where global growth, with the year over-year quarterly annualised growth rate stood at 3.5 percent while on the full year basis, it is expected to slow down from 3.3 percent in 2025 to reach 3.2 percent in 2025 and hit 3.1 percent in 2026 with risks such as prolonged uncertainty and protectionism on the trade front while growth is expected to remain unchanged in 2025 from 4.1 percent registered in 2024 where it is expected to edge up to 4.4 percent in 2026 in the Sub-Saharan African region.
The case for Mauritius: Policies, value-added initiatives create conducive environment
The SBM Insights remarks that the growth outlook for the jurisdiction is underpinned by dedicated policies and value-added initiatives spearheaded by both the public and private sectors, reflecting the country’s generally healthy fundamentals in the wake of a demanding and volatile operating landscape, with implications for the real, fiscal, financial, and external sectors.
It pinpoints the growth outlook for 2025, with real GDP growth expected to be underpinned by the appreciable performances of activities within the financial and insurance sector, as well as professional and business services, which will benefit from their healthy business models and headway achieved in terms of market expansion, alongside a supportive domestic economic environment. In the same vein, the Mauritius International Financial Centre (MIFC) is forging its reputation as a trustworthy and competitive jurisdiction, adhering to efforts deployed by the authorities and the Government while complying with advocated international standards and enriching the depth of its value proposition. In the context, the recent Global Financial Centres Index Report reveals that the jurisdiction is the most competitive financial hub, where it clinched six spots as compared to the previous year, to be ranked 52nd globally.
There are several challenges to the GDP growth, expected to be hindered by the tepid expansion of textile manufacturing, having witnessed a contraction during the past two years, and expected to decline further, set against the dimmed global trade landscape and accompanying vulnerability hinging on persistent uncertainty surrounding the renewal of the African Growth and Opportunity Act, after its expiry on September 30, 2025.
Moving Ahead: Continuous path set for Growth Momentum
The Government has projected growth to shore up at 3.7 percent during the FY 2025/26, coupled with a targeted real GDP growth path between 4 percent and 5 percent over the medium term. The report notes that, taking into account a testing global landscape and current domestic macroeconomic indicators, it is comforting to see intentions and current initiatives heralded by the Government to help improve the economic fundamentals, boost the business environment and give a shot to the arms of investment confidence while at the same time tackling the structural challenges posed to the economy.
The key in transitioning to a New Economic Model, the SBM remarks, lies in structural reforms geared towards bolstering the productive capacity, complemented by a refocus on investment and exports as levers of growth. It hints at the National budget 2025 – 2026, where a slew of measures were earmarked towards a resilient economy while banking on economic renewal, fiscal consolidation, and a new social order where the Government has set the way forward to:
- Further diversify the economy, with the development of the renewable energy sector, waste-to-wealth initiatives, blue economy, and creative industries;
- Incentivise investment and boost productivity in various sectors of the economy along with reinforcing export promotion;
- Harness the investment and export opportunities from trade agreements, i.e. the African Continental Free Trade Area, the Comprehensive Economic Cooperation and Partnership Agreement with India and the Free Trade Agreement with China.
As part of efforts to achieve such objectives, the Prime Minister Dr Navin Ramgoolam, following his recent State visit to India, has outlined a slew of projects and support to Mauritius in terms of grants and line of credit in strategic sectors under a Special Economic Package of USD 680 million. He mentioned that under a line of credit worth USD 440 million, four projects are expected to be implemented, namely:
- A new Air Traffic Control Tower at the SSR International Airport,
- Development of Motorway M4,
- Road Phase II
- Acquisition of port equipment by the Cargo Handling Corporation Ltd
On another count, the country is also expected to reap benefits owing to the official relaunching of the Regional Cooperation and Integration Council (RCIC), whose main objective is to promote regional cooperation projects and facilitate exchanges between partner countries and the private sector.
There are several key success factors to help pave the way for a consolidation plan, deemed to reap the targeted results for Mauritius as outlined:
- Implementing the programme in a progressive and calculated fashion within the wider context of a clear, coherent and credible medium-term policy agenda
- Designing the programme in a fitting way to foster broad-based stakeholder acceptability (i.e. amongst households, businesses, private sector institutions and social partners), complemented by well-defined social transfers aimed at alleviating the potential impacts on affected groups, with timely, temporary and targeted support to communities and businesses where appropriate
- Preserving the integrity and transparency of set fiscal rules along with maintaining fiscal discipline
- Prioritising public expenditures, promoting proper cost management and enhancing spending efficiency, while allowing automatic stabilisers to function properly
- Securing the predictability, simplicity and attractiveness of the income tax regime, in support of investment
- Reinforcing multi-year fiscal planning and macroeconomic forecasting to allow for realistic evaluations of the effects of fiscal measures on socio-economic growth.
