Poverty in Mauritius: A Promising Decline to 8% This Year

In a nation that has grappled with the spectre of poverty, particularly during the harrowing days of the pandemic, Mauritius is poised for a significant turnaround. The World Bank has projected that the poverty rate, which soared alarmingly from 11% to 16% during the COVID-19 crisis in 2020, is set to plummet to approximately 8% by the end of this year, with a hopeful trajectory extending into the future.

By 2025, the threshold of poverty—defined as living on less than $6.85 a day—could see this figure further reduced to around 8%.

The World Bank’s forecasts suggest that by 2027, this rate may dip even lower, reaching an encouraging 7.2%.

However, the road ahead is fraught with challenges. The World Bank has cautioned that Mauritius’s economic growth is expected to moderate to 3.2% by 2025, largely due to rising American tariffs and modest public investment expenditures.

The budget deficit is anticipated to shrink to 5.4% of GDP, yet the public debt remains a staggering 87.5% of GDP.

Despite these daunting figures, the World Bank remains optimistic about the future of poverty in Mauritius.

They note that public transfers, averaging 7% of GDP, will play a crucial role in alleviating poverty levels.

Yet, the spectre of a global economic slowdown looms large, threatening the vital tourism and financial services sectors that underpin Mauritius’s economy.

Budgetary slippages and downgrades in foreign credit ratings could further exacerbate borrowing costs for both public and private sectors.

To navigate these turbulent waters, Mauritius must not only pursue fiscal consolidation but also stimulate growth by addressing critical bottlenecks in port logistics and air connectivity.

A deeper regional economic integration, alongside efforts to attract private investment in renewable energy and innovative sectors, will be essential.

Furthermore, enhancing disaster preparedness and bolstering budgetary reserves will be pivotal in mitigating the impacts of climate shocks.

As Mauritius stands on the brink of a potential economic renaissance, the hope remains that these strategies will not only reduce poverty but also pave the way for a more resilient and prosperous future.

Source: Defi Media