Washington, DC – July 15, 2026: The Executive Board of the International Monetary Fund (IMF) has completed the Article IV Consultation for Mauritius, where it has observed that the local economy remains resilient, while macroeconomic conditions have weakened on the back of the external environment.
Real GDP grew by 3.2 percent in 2025, driven by continued strength in services, including tourism and financial services. On the other hand, inflation saw a rise due to policy-related price increases in 2025, while it eased in the early period of 2026, before witnessing a rise on account of the war, heightened to 3.6 percent in April 2026. The external current account deficit widened to 7.1 percent of GDP in 2025.
The outlook has softened while risks are being tilted to the downside, with real GDP growth poised to slow down to 2.8 percent in 2026, reflecting adverse spillovers arising from the war trickling to weaker tourism and higher commodity prices, before seeing a gradual recovery to 3.2 percent over the medium term as higher investment offsets demographic headwinds.
On the other hand, inflation is poised to see a significant rise to the tune of 6.4 percent (year‑on‑year) by end‑2026, while expected to taper down towards the midpoint of the Bank of Mauritius target of 2-5 percent over the medium term.
The Executive Directors have observed that economic activity remains resilient in the wake of weakened macroeconomic conditions amid a more adverse external environment. In context, there is a need to recalibrate the macro-economic policy mix to rebuild buffers and boost macro-economic resilience.
The Bank of Mauritius (BoM) is encouraged to pursue exchange rate flexibility deemed as a key shock absorber and leverage foreign exchange intervention in a limited and targeted fashion. The IMF Directors have reiterated the importance of safeguarding central bank independence, encompassing the swift adoption of amendments to the BoM Act and slashing the Central Bank’s involvement in non-core activities.
While the financial sector risks appear contained, there is a need to undertake close monitoring, including bank‑sovereign nexus, non‑resident and global business companies’ flows as well as the adoption of virtual assets.
The IMF has also welcomed steady progress to boost the AML/CFT framework while encouraging authorities to sustain it.
The directors also welcomed adherence to the Special Data Dissemination Standard Plus while calling for sustained efforts to further strengthen data quality and support informed policymaking.
