The announcement of the third country fabric exemption seemed like a breath of fresh air for Mauritius. However, this feeling did not last long. Reality was back in the forefront when the Mauritius Commercial Bank (MCB) and the Central Statistics Office (CSO) published their reports expressing their fears on the general state of the economy. Moreover, the World Economic Forum announced that Mauritius isn’t competitive as it used to be.

According to the MCB and CSO, the gross domestic product (GDP) growth will be less important than forecast. For the MCB, the GDP growth will not exceed 4.5% whereas the CSO thinks it will be around 4.6%. Both institutions had forecast a higher percentage in their previous reports – 4.8% for the MCB and 4.7% for the CSO.

Both institutions attribute this to the depression in the main economic sectors: tourism, textiles, sugar… The three economic pillars are threatened by uncontrollable external factors and solutions have yet to be found. “Of course, we have structural problems and this can be seen through a quite low growth. The EPZ is restructuring and we have a lot of work ahead to reposition Mauritius,” comments the director of the Joint Economic Council, Raj Makoond.

In the textile sector, the MCB thinks there will be another 1% contraction, which could lead to an alarming situation. The forecast is no better from the CSO side: export revenue, according to them, will be inferior to expectations by Rs 600 million. This sector has also faced major job losses. The closing down of many factories has brought a considerable drop in the general employment rate of big companies.

Tourism is also in a fix. Arrivals are not as high as expected – 710,000 instead of 725,000 planned in February. The CSO thinks that there will probably be a 1.1% growth rate thanks to recent intensive marketing programs. “What is really worrying is the fact that we’ve seen a drop in the number of tourist arrivals from our main European markets such as Great Britain or Germany,” MCB chief economist, Gilbert Gnany, says.

Improved prospects abroad

While expectations were around 590,000 tons for sugar, both the CSO and the MCB have reviewed this figure to 570,000 tons (MCB) and 575,000 tons (CSO).

What is however surprising and comforting is the improvement of growth at the international level. The International Monetary Fund (IMF) expects a 5% world growth instead of the previously announced 4.6%. It is thus comforting to know that the “exterior dangers” as the prime minister called them, are fading out. As a result, the economic situation in the country should get better as well.

And yet local expectations don’t seem to point in that direction. On the contrary, the MCB and CSO are far from optimistic about the future. Nobody can predict what real effects the dismantling of the multi fibre agreement next January and the threats of a drop in EU sugar prices will have on our economy.