Business circles are in turmoil. The announced rise in the trade deficit worries the economic and financial sectors. The Central Statistics Office (CSO) forecasts that the deficit will reach Rs 28.7 billion for 2005 while it was Rs 21.3 billion last year ? already considered as a high record. According to specialists, this alarming rate is due to two main factors. On the one-hand the problems in the export processing zone ? more particularly in textile ? have led to a drop in the country?s revenue. On the other, the import invoice hasn?t stopped increasing as the oil price constantly rises. For the first three months of the year, the trade deficit has already reached Rs 5.3 billion.

The problem is that the situation does not seem likely to improve. The sugar industry has tough times ahead with the EU announced fall of about 39% in the price of sugar; the textile sector could encounter even more problems than it is already facing; the value of the dollar is increasing while the euro is going down?

All this is far from restoring confidence as regards the amount of the trade deficit for 2005. With the project of transforming the country into a duty-free haven ? presented as an economic saviour in these difficult times ? the deficit should be even more severe as the gap between imports and exports will be even greater.

The only hope some stakeholders keep is that other sectors, which still work and can bring some revenue to the country, can make good the deficit. Financial services, tourism as well as information and communication technologies are the three sectors on which Mauritius will have to rely to get through.