In view of the sharp deterioration in global economic conditions, the MCB has forecasted a further downgrade of the domestic economy’s growth outlook for this year.
In the latest Economic Outlook, MCB economists have predicted that GDP growth at market prices could attain 6.0% in 2022, representing a 20 basis points cut from its previous projection made in April.
This updated estimate is in line with the latest IMF projection.
Notwithstanding relief from budgetary measures, the MCB expects a more restrained outcome in manufacturing activities, especially within the textile and food segments.
“Additionally, in line with the further rise in cost of materials, a less prominent expansion is envisaged in the construction sector while real estate activities should also evolve at a more tempered pace given the difficult context.”
Nonetheless, it said economic growth should be underpinned by a marginally better performance in the tourism industry despite prevailing air connectivity constraints as well as the testing economic conditions in some of Mauritius’ key markets.
With regard to 2023, the MCB said the nationwide economic expansion is projected at 5.5%.
Despite the fall in vegetable prices lately and successive FX interventions by the Bank of Mauritius to support the rupee, the Consumer Price Index has remained under pressure.
The MCB expects the annual average headline inflation to rise further to attain 10.2% level as at December 2022.
This is an upward revision from its April forecast largely attributable to the impact of continued pressures on the rupee and the removal of subsidies on essential products.
It predicted that Key Repo Rate, currently at 2.25%, could go also up in 2023.
