IMF’s 2024 Forecast Warns Mauritius to Rebuild Foreign Reserves

The IMF recommends that the Bank of Mauritius rebuild its foreign reserves. The message from the IMF is clear. BoM must replenish its foreign currency reserves, which have been depleted in the wake of Covid, to enhance the country’s economic resilience against potential shocks. This is one of the recommendations of the financial institution following the visit of its experts as part of the preparation of the 2024 Article IV Consultation report on Mauritius.

In a statement issued late last night, the IMF mission, led by Mariana Colacelli from January 9 to 18, emphasizes, based on the initial findings following their visit, that the Bank of Mauritius must enhance the resilience of the financial sector by closely monitoring risks, including those related to operations in the country’s international financial center.

The IMF statement also demonstrates good economic management following the pandemic with real growth of 8.9% in 2022 and an estimated 6.9% for last year, driven by the performance of tourism, construction, and financial services. For 2024, growth is projected at 4.9%, according to the IMF, which however notes real risks of a global growth slowdown. This could negatively impact tourism with higher fuel and food prices due to geopolitical tensions related to the Russo-Ukrainian war and conflicts in the Middle East.

The IMF also proposes fiscal consolidation that should focus on reducing public debt, mobilizing additional tax revenues, and reducing current expenses while protecting the most vulnerable.

Source: l’Express