The Bank of Mauritius (BoM) predicts a global inflation rate of 4% by the end of 2024 while the Gross Domestic Product (GDP) growth is expected to exceed 7% this year.
According to Defi Media, these factors were taken into consideration by the Monetary Policy Committee during its meeting on Wednesday. As a result, the policy rate was kept at 4.50%.
In terms of inflation, the BoM estimates a global rate of 7% this year, which is expected to decrease to 4% by the end of next year. “Given that the year-on-year inflation is already below 5%, it shows concrete signs that global inflation is gradually converging towards the target range set by the Bank,” according to the Bank of Mauritius.
It believes that the normalisation of global supply chains and the decline in commodity prices have helped to mitigate inflation in Mauritius in October 2023.
The BoM also highlighted that underlying inflationary pressures have also decreased.
On the economic front, the BOM reportedly painted a positive picture of the second quarter of this year.
It noted the improvement in labour market conditions and a decrease in the unemployment rate.
The BoM believes that growth will be widespread and will continue until 2023-2024.
Other positive factors taken into account by the BoM include tourist arrivals, a reduction in the current account deficit, private and public infrastructure projects, and household consumption expenditure, which is expected to improve due to the recovery in real wages and government support.
The BoM also mentioned the normalisation of the foreign exchange market. “Foreign investment flows are steady, and the gross official reserves of foreign exchange remain at a comfortable level of 10 months of import cover,” BoM said.
It believes that the banking sector remains strong with sufficient capital and liquidity reserves.
Source: Defi Media
