Mauritius Economy and Currency

Ever since gaining independence from Britain in 1968 the economy of Mauritius has grown steadily at around 5% annually. Growth slackened off in 2002 at about 2.2%, but rose again in 2003 to 4.1%, dipping to 3.1% in 2005. Sugar was and is a dominant crop, and still accounts for more than a third of export earnings. There are growing industrial, services, and tourist sectors. An export processing zone set up in 1970 has been successful, particularly in garment manufacture. The financial services industry has been a more recent Government-inspired initiative, but is now developing strongly. GDP per head has risen from $219 in 1968 to about $13,200 at purchasing power parity in 2005, putting Mauritius in the middle income range. Unemployment is running at about 10%, with inflation at 4%.

The Mauritian currency is the rupee (MR). Exchange controls were dismantled in stages between 1984 and 1994. Currently (2006) US$1 = about MR30. Investors are still required to demonstrate the source of funds to be repatriated, and must be up to date with local taxation.

The 2005 budget swept away most import duties with the aim of boosting the domestic economy.

Concluding an Article IV consultation with Mauritius in January, 2006, the IMF noted some economic problems due to adverse external trade circumstances, and recommended privatization of state enterprises plus broadening of the tax base.

The Mauritius government has said that it is expecting the economy to stage a strong recovery in 2006, anticipating growth of 5.1% this year.